A hypothetical survey shows that most bike riders prefer Honda to Yamaha. What does this mean in the ordinal and cardinal utility analysis? If the survey is true, how do you reconcile the fact that we find more people driving Yamaha motor bikes than those driving Honda?

A hypothetical survey shows that most bike riders prefer Honda to Yamaha. What does this mean in the ordinal and cardinal utility analysis? If the survey is true, how do you reconcile the fact that we find more people driving Yamaha motor bikes than those driving Honda?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 15.2IP

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can you please help me with questions c, d, e and f? Thanks!
The goal of the consumer is to maximize the total utility or satisfaction derived from their purchase choices, given the unique budget constraint. To calculate total utility of a given combination of T-shirts and movies, one would use the following approach: Group of answer choices For a given combination of T-shirts and movies, assign a number of utils to that combination. For a given combination of T-shirts and movies, survey a group of individuals to determine an average for utils to be assigned to the number of T-shirts and movies. Use utils as a measure of utility, assigning a specific number to T-shirts and movies, and then add those together. For a given combination of T-shirts and movies, use Google to identify the number of utils associated with the number of T-shirts and movies and then sum them.
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. 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 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).
Kroger, the country's leading grocery-only chain, added a line of private label organic and natural foods call Simple Truth to its stores. If you've priced organic foods, you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $2.3, whereas Simple Truth eggs are priced at $4.8 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However, if prices get too high, consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional farming, and those higher costs are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per year for conventionally-farmed eggs are $1 million per year, but an organic egg farmer's fixed costs are three times that amount. Further assume that the organic farmer's variable costs of $2.6 per dozen are twice as…
Eren’s two main hobbies are taking vacations overseas (V) and eating expensive meals (M). His utility function is given as: U(V,M) = V^2MLast year, the average price of taking a vacation overseas was US$200 and the average price of an expensive meal is $50. However, due to supply problems in Onions, the average price of an expensive meal rose to $75. The average price of a vacation did not change. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should be given to Eren to offset his change un utility due to the price increase of an expensive meal. Calculate the compensative variation (CV).
Given the utility function 1/2 1/2 U = x₁x₂find a general expression for MRCS in terms of x₁ and x₂.
Kroger, the country's leading grocery-only chain, added a line of private latbel organic and natural foods call Simple Truth to its stores. If you've priced organic foods, you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $1.5, whereas Simple Truth eggs are priced at $3.5 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However, if prices get too high, consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional farming, and those higher costs are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per year for conventionally-farmed eggs are $1 milion per year, but an organic egg farmer's fixed costs are four times that amount. Further assume that the organic farmer's variable costs of $2.7 per dozen are three times as much as…
Assume: 1) Two goods only: Good X and Good Y 2) Two (groups of) individuals: Individual A and Individual B 3) Utility function of Individual A: UA(Xa, Ya) = 300X4 –÷X + YA 4) Utility function of Individual B: Ug (Xg, Yg) = 100XB –÷Xỉ + Yg en = (ež, e%) = (150,20000) eg = (ež,e%) = (400,0) 5) Endowment for individual A: 6) Endowment for individual B: Write down and explain market clearing conditions, budget constraints and optimization conditions for the two individuals.
There are two shows on Netflix that Jeff can watch, Show 1 and Show 2. x₁ measures the number of episodes watched of Show 1 and x₂ measures the number of episodes watched of Show 2. Jeff's preferences can be represented by u(x₁, x₂) = x² + ax². Jeff has 11 hours available for watching Netflix today. Each episode of Show 1 lasts 30 minutes, while each episode of Show 2 lasts one hour. For all question parts, round to three decimal places if necessary. For parts (a) - (f), let a = 1. Draw Jeff's indifference curves for the utility levels u = 4, 9, 16. Draw a straight line between the bundles (x₁, x₂) = (4, 0) and (x₁, x2) = (0, 4). Now, use your picture to determine whether the following two statements are true or false. Answer "1" for true. Answer "0" for false. a) Statement 1: Jeff's preferences are strongly monotone. 1 b) Statement 2: Jeff's preferences are strictly convex. 0 c) Find the bundle at which one of Jeff's indifference curves is tangent to the budget line. (x₁, x^2) = ( d)…
Upon graduating from UT this May, you take on a management position working at UtMax theater. You will consider the utility of seeing performance over 1 month, and suppose that at a regular price of $$$ per ticket (my assigned ticket price is 145), customers will see no performance, however with the price reduced by $5, customers will see one performance per month and when reduced by $10, customers will see two performances. As long as the number performances, x, is small, your demand function for performance can be modeled by p=D(x). Write down your demand function.