4. a. Consider a consumer with preferences defined over x and y. Demonstrate that it is possible they would choose to consume some of both commodities when their income is I but would choose to consume only x when their income is I’ > I. (Remember: if you can draw it without violating any of the basic assumptions on preferences, it could happen.) b. Conversely, demonstrate that it is possible they would choose to consume only x when their income is I but would choose to consume x and y when their income is I’ > I. c. Finally, show it is possible that they would choose to consume only y when their income is I but would choose to consume only x when their income is I’ > I.

Q: A consumer has preferences for two goods that are represented by the utility function u(x1, x2)

A: Utility function : U = 2(x1)0.5 + x20.5 Price of good 1 : P1 , Price of good 2 : P2 Monotonic…

Q: Rosalia buys only two goods X₁ and x₂. Her utility function is Cobb-Douglas. Her optimal choices…

A: Given the utility function is Cobb-Douglas of the form U = x1 a x2 b  where a+b= 1  budget…

Q: marginal utility

A: In the context of the paragraph, "marginal Utility" refers to the additional delight or advantage…

Q: Sukai consumes only apples and tomatoes. Her utility function is U(x, y) = X2 y where x is the…

A: GIVEN     Ans. Utility Function, U(x, y) = x^2 y^8 Income ( M) = $320 the price of apples( Px) = $4…

Q: W² 40 Hatfield and McCoy hate each other. The only good they both consume is whiskey. Hatfield's…

A: The utility function for Hatfield is given as The utility function for McCoy is given as The Sheriff…

Q: 1. Use the following information to answer the questions below. Suppose that a consumer chooses to…

A: Consumer theory is essential in economics as it examines how individuals optimize their satisfaction…

Q: 2. [This question shows that our marginal utility calculations for consumer behav- ior essentially…

A: Marginal utility: The utility function determines all those consumption bundles that provide the…

Q: a) Assume that an individual consumes two goods, and achieves the benegàby çonsuming respectively i…

A: Individuals and businesses strive for the highest level of enjoyment from their economic actions,…

Q: a) Graph her consumer choice model (with chicken onthe x axis. Nowlet price of chicl fall, causing…

A: Two goods are considered in the market chicken and rice with price of chicken and rice denoted as Pc…

Q: MUA =z = 30 - 4x MUB = z = 20 - 5y, where z is marginal utility per dollar measured in utils, x is…

A: Given that, MUA = z = 30-4x MUB = z=20-5y Consumer income =$7 Budget constraints ; x+y = 7 At…

Q: A consumer has a constant MRS of x for y equal to 1/4 for any quantity of x or y. They currently…

A: The Marginal Rate of Substitution (MRS) is a concept in economics that measures the rate at which a…

Q: If this consumer has $11.00 to spend on cans of beer and slices of pizza in any given week, then…

A: Utility refers to the satisfaction attained from the consumption. The aim of the rational consumer…

Q: 2. Consider a cake that is half-chocolate and half-vanilla that will be apportioned to Alice, Bob,…

A: The aim of this question is to share a cake that is half chocolate and half vanilla. It gets a…

Q: 1. Let the following table represents the total utility of a given consumer, in the cardinal utility…

A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: Answer the question on the basis of the following total utility data for products L and M. Assume…

A: Given,In other words, the income and the prices of the good the consumer aims to maximize the…

Q: Jill likes to consume coffee and cream in a very particular way: with every cup of coffee she…

A: Jill is a utility maximizer. She decides to spend her income is $120 per month on coffee and cream.…

Q: (a) Show what the consumer's indifference cur- ves look like when consumption and leisure are…

A: a. When consumption and leisure are perfect substitutes, the indifference curves are negatively…

Q: You are choosing between two goods, X and Y, and your marginal utility from each is shown in the…

A: Dear student, you have asked multiple sub-part questions in a single post. In such a case, I will be…

Q: A consumer is observed making two choices. First, he faces prices p = (1,3) with wealth w = 8 but is…

A: Given,  1 Consumer, Two Choices:  Firstly : p=(1,3), wealth w = 8, Bundle chosen : x=(2, 2)…

Q: Assume the graph shown represents Grace's budget constraint. Which of the following is true?…

A: Budget constraint: given the price of 2 goods and consumer’s income. The budget constraint shows…

Q: Consider a two-person ay consume goods and y. Ann utility over these two goods is: u(TA, YA) and…

A: Contract Curve: The contract curve shows the allocation of two goods among the two individuals,…

Q: Vinny consumes tacos and chicken wings. To keep his utility constant, he must consume more tacos if…

A: Vinny's consumption preferences for tacos and chicken wings provide an interesting insight into his…

Q: The law of diminishing marginal utility says that...   A. as a person consumes more and more of a…

A: The marginal utility is the satisfaction derived from the consumption of an additional unit. The…

Q: a) Assume that an individual consumes two goods, and achieves the benebitby consuming respectively 1…

A: (Since you have asked many questions, we will solve the first one for you. If you want any specific…

Q: E. Show that if Mr. Green is forced to spend a fixed amount of his income on a particular good, his…

A: Utility maximisation is the case where consumer spend their income freely to equalised the MRS =…

Q: Suppose Monty has 860 to spend on treats () and toys (9). The price of toys is p, -$2 and the price…

A: Given that Monty's utility function is  ux,y=2xy    ................(1) Marginal utility from good…

Q: Kofi consumes two goods (x) and (y). The following utility function represents his preferences: u(x,…

A: Kofi's preference is represented by the following utility function: u(x,y)=0.4lnx+0.6lnyHere x and y…

Q: Pls help with thsi question I am stuck   Given the image attatched: 1.Given the above Marginal…

A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.