7. An individual's utility function is given by U =1000x, +450x, +5 x,x, -2x – x where x, is the amount of leisure measured in hours per week and x, is income earned measured in cedis per week. Determine the value of the marginal utilities, when x = 138 and x, = 500. Hence estimate the change in utility if the individual works for an extra hour, which increases earned income by GH¢15 per week. Does the law of diminishing utility hold for this function?
Q: Q8. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F. Suppose as Case 1, Total…
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Q: Q9. Consider a utility function: U (F,C) = FC so MU_F = C and MU_C = F. Suppose as Case X, Total…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…
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Q: An individuals utility function is given by U = 340x1 + 960x2 + 2x1a2 – 2x – 23/2, when the weekly…
A: Answer is given below
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A: We have formula fro MRS = -MUx/MUy
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Q: An individuals utility function is given by U = 340x1 + 960x2 + 2x, x2 - 2x – x3/2, when the weekly…
A: Given that x1 = 132 and x2 = 760
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- Problem Set 1. A firm's production function is º=50L-0.01Ľ' , where L denotes the size of the workforce. Find the value of MP in the case when: (a) L=1, (b) L=10, (c) L=100, (d) L=1000 Does the law of diminishing marginal productivity apply to this particular function? 2. Show that the price elasticity of demand is constant for demand functions of the form A P = Q" where A and n are positive constants. 3. The demand and total cost functions of a good are respectively 4P+Q-16=0 and ТС %3D 4 + 20 — 10 20 a) Find expressions for TR, (profit) 1 , MR, and MC in terms of Q. b) Solve the equation dn = 0 ÕP and hence determine the value of Q which maximizes profit. c) Verify that, at the point of maximum profit, MR=MC. 4. The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: (a) GH¢10 million for the land (b) GH¢'/, million per floor (e) Specialized costs of GH¢10000× per floor. How many floors should the office complex contain if…An individual’s utility function is given by where is the amount of leisure measured in hours per week and is income earned measured in cedis per week. Determine the value of the marginal utilities, when = 138 and = 500. Hence estimate the change in utility if the individual works for an extra hour, which increases earned income by GH¢15 per week. Does the law of diminishing utility hold for this function?. An individual's utility function is given by u = 1000 x, + 450 x. + 5x, x. - 2x-x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢ 15 per week. Does the law of diminishing ut ility hold for this function? %3D
- My Moodle My Favou tion 6 An individuals utility function is given by ret rered U = 340x1 + 960x2 + 2x1x2 – 2a- a/2, ed out of when the weekly amount of leisure is x1 132 and earned income is 12 = 760 answer the following: 1. The marginal utility of x1 is ag tion 2. The marginal utility of x2 is 3. Use the small increments formula to estimate the change in the utility when r1 decreases by 1 and x2 increases by 4. The change = 4. Does the law of diminishing marginal utility hold? 5. The MRCS at a given values is Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and not , for a decimal point. Next page revious page Mock paper ► - Working from video in SVG Jump to... formatJien is just bored all the time; no amount of success makes him happy, it seems. Below is a list of his income for the last several years and the utility he experienced per dollar of income: Year Yearly Income Utility per Dollar Earned 2017 $60,000 2 utils 2018 $70,000 1.8 2019 $100,000 1.5 2020 $120,000 1 2021 $145,000 0.40 From the above, we can say that Jien most likely is different from most people economists study in terms of risk attitudes is "risk loving" will not take a fair bet has a utility of wealth curve that is a straight linecook -int ences a) Chika has calculated the marginal utility that she derives from her paid employment and from leisure. This is presented in table below. In her ideal world, where she could work as few or as many hours as she wished, how would she allocate her sixteen waking hours? (She does need to sleep.) Hours 1 2 3 4 5 6 7 8 9 10 MU Paid Employment 80 75 70 65 60 55 50 45 40 35 MU Leisure 120 110 100 90 80 70 60 50 40 30 9 hours working and 40 hours leisure. b) Unfortunately, Chika begins to realize that unless she gets an education she will not enjoy a high salary and therefore, will not be able to afford more leisure time. She therefore decides to spend six hours each day studying (in addition to her eight hours of sleep). How will she now divide the remaining hours between work and leisure?! hours working and hours leisure. Help Save C
- 1) Sharon spends her time (20h) between leisure (L) and work and he consume Y product from his working income (Py=1). Assume that she gets W$ per hour of working and has the following utility function: U (L, Y) =LY+2L C. vv). e. VS What will happen to L, Y and H if the wage per hour (W) will decrease? d. How would your answer to the previous question (c) will change if Sharon has a fixed amount of money (Wo) that is not connected to W? If Sharon has the following utility function: U= L³+ Y², is it possible that she will choose not to work at all? Explain and show the condition for your result if exists. |||Daniel and Kjell are writing a paper together. Daniel is the PhD supervisor and thus is the first to decide how many hours, hp. to put into the project. After observing the amount of time that Daniel contributes, Kjell decides how many hours, hK. to contribute. Daniel's utility function is 12(hp+ hx)5 -hp Kjell's utility function is 14(hp+hx)0.-hx How many hours does Kjell spend on the project? Select one alternative: O 49 O 26 O 32a) Chika has calculated the marginal utility that she derives from her paid employment and from leisure. This is presented in table below. In her ideal world, where she could work as few or as many hours as she wished, how would she allocate her sixteen waking hours? (She does need to sleep.) Hours 1 2 3 4 5 6 7 8 9 10 MU Paid Employment 105 95 85 75 65 55 45 35 25 15 MU Leisure 100 90 80 70 60 50 40 30 20 10 hours working and b) Unfortunately, Chika begins to realize that unless she gets an education she will not enjoy a high salary and therefore, will not be able to afford more leisure time. She therefore decides to spend six hours each day studying (in addition to her eight hours of sleep). How will she now divide the remaining hours between work and leisure? hours working and hours leisure. hours leisure.
- Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate for the equivalent variation (EV) for the price change.Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Calculate the change in consumer surplus from consuming the expensivemeals considering the price change (Hint: you need to compare his optimalconsumption bundle before and after the price change to get the change in CS).