A utility function is given as U = √MB where B represents the quantity of books consumed and M represents magazines. This uility is shown via indifference curves in the diagram to the right. Holding the number of magazines constant at 20 units, as we increase our consumption of books from 5 units to 10 to 15 and to 20 units, marginal utility with respect to books is Magazines (Y) 50 45- 40 35 30- 25- 20- 15- 10- 5- 04 RSTV 10 15 20 25 30 35 40 45 5

A utility function is given as U = √MB where B represents the quantity of books consumed and M represents magazines. This uility is shown via indifference curves in the diagram to the right. Holding the number of magazines constant at 20 units, as we increase our consumption of books from 5 units to 10 to 15 and to 20 units, marginal utility with respect to books is Magazines (Y) 50 45- 40 35 30- 25- 20- 15- 10- 5- 04 RSTV 10 15 20 25 30 35 40 45 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A consumer has the following utility function: U(X,Y)= 400X2/5Y3/5 Suppose that the price of a spa…

A: To solve the above problem we construct Lagrangian in which Total cost function with constraint of…

Q: Let qA be the quantity of apples and go the quantity of oranges. A consumer's utility is described…

A: Consumer utility refers to the satisfaction or happiness that a consumer usually derives from the…

Q: Good X costs $8 and good Y costs $4 per unit. His utility function is U = 4.5XY. (a) Calculate Moe's…

A: here we calculate the Moes's utility maximizing purchases of X and Y and constrained utility maximum…

Q: Using the concept of consumer choices, draw a graphical representation of utility maximization. Your…

A: The diagram is shown in the next step.

Q: Abigail, Bernard, Cornwallis, and Douglas each derive a distinct amount of utility from consuming…

A: Utility theory is a positive theory. that looks to make sense of the people's noticed way of…

Q: Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers…

A: ***Since the student has posted a question with multiple subparts, so the expert is required to…

Q: a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese…

A: Total customers = 120,000 Price of other products = Pm= $1 Price of Vietnamese Meals = Pv The…

Q: For each of the following utility functions get the marginal utility of consumption of each of the…

A: This can be defined as a concept that shows that when a purchaser purchases an extra unit of any…

Q: A consumer with income I=120 facing prices pX = 4 and pY = 8 for two goods X and Y (for each good…

A: In utility maximization problem, a consumer attains his equilibrium or optimal consumption bundle…

Q: Anna has an income of 1000 euros and utility function U(x,y)=x²y³. The prices of the two goods are…

A: Budget Constraint:A budget constraint represents the limit on the consumption of goods and services…

Q: abby is a single mom with a weekly budget of $100. She can spend her weekly income on food and…

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

Q: Do the preferences represented by this utility function satisfy monotonicity? Why or not? D. why

A: A function is monotonic if it is increasing throughout without any change or decreasing throughout.…

Q: Questions 1. Will's utility from vacations (91) and meals (92) is given by the function U(V, M) = 91…

A: Step 1:Step 2:

Q: 3. Consider the following utility function: U = 5 x1 + 2 x2 Also consider the following bundles:…

A: Total utility:Total utility is the sum total of the utility or satisfaction that is derived from the…

Q: A consumer's utility function is -a u = x1x², where ₁ and 2 are the quantities consumed of goods one…

A: The total level of satisfaction that an individual derives from the consumption of good is referred…

Q: Greg has the following utility function: u=x0.541x0.462. He has an income of $72.00, and he faces…

A: Compensating variation is the additional amount which is required to provide the same utility level…

Q: Define the Marginal Rate of Substitution between two goods (X and Y). If a consumer’s preferences…

A: Answer: Definition of the marginal rate of substitution (MRS): The marginal rate of substitution…

Q: A utility function is given as U = √MB where B represents the quantity of books consumed and M…

A: The sense of fulfillment or benefit that a consumer obtains from consuming a commodity or service is…

Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

A utility function is given as
U = √MB
where B represents the quantity of books consumed and
M represents magazines. This uülity is shown via
indifference curves in the diagram to the right.
Holding the number of magazines constant at 20 units, as
we increase our consumption of books from 5 units to 10
to 15 and to 20 units, marginal utility with respect to books.
is
CIES
Magazines (Y)
50-
45
40
35
30
25-
20-
15-
10-
5
0-
10
15
RSTV
a quie
10 15 20 25 30 35 40
Books (X)
45 5
eboo
SCOR
scor
scor
score
score

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Utility Function:

VIEW

Step 2: Calculate marginal Utility:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

2. Vibha consumes three goods X, (shirts), X, (food in pounds), and X, (shelter in square feet). Vibha's utility function is given by: U (X,, X, X,) = 5ln Xt 3ln X + 2ln X, where In (x) or log. (x) is the natural logarithm. Vibha's weekly income is $100. Let the price of X, = P, = $10, the price of X, = P, = $2, and the price of X, = P; = $4. What is the equation for Vibha's budget constraint? а. b. |How many shirts, pounds of food, and square feet of shelter, will Vibha consume, as a rational consumer?
The utility function of a consumer is u = √x + 2y. (a) Calculate how much MRS of that consumer when x = 4. (b) If the consumer currently consumes 4 units of goods x and the price ratio of Px / Py = 1/4, then the consumer should increase or decrease the consumption of goods x?
A student has a lunch utility function U(S, P) 8S + 3P, where S is number of salads per month and P is number of pizzas per month. The price of a salad is $5, the price of a pizza is 8, and his monthly income for lunch is $80. a) Derive the equation representing the consumer's demand for Salad. Represent the demand for Salad graphically. b) The price of Salad goes up to $25 and the price of Pizza does not change. Compute and represent graphically the new equilibrium of the student. What can you tell about the substitution effect on Salad and pizza
You consume music (M) and concert tickets (C). Your utility function is U(M, C) = M1/4C3/4. The marginal utility for concert tickets, MUC is MUC =3/4C-1/2M1/4 and the marginal utility for music, MUM is MUm = 1/4C3/4M-3/4 (a) Calculate MRSMC using only the given marginal utilities. (b) Solve for the utility of bundle A where M = 16 and C = 16. Solve for your utility at bundle B where M = 128 and C = 8. Are the utilities the same? (c) Calculate MRSMC at bundle A and at bundle B. Are they the same? (d) Are your indifference curves convex? Draw the ICs. Make sure to label the quantities of the consumption bundles, the axis, and the MRS at those bundles.
Number of Sodas per day Total Utility Marginal Utilit 1 20 35 3 47 12 4 10 Refer to the table, The marginal utility of the second soda per day is L. (Answer should be in the form of numerical characters, e.g. 20) Enter your answer here
2nd attempt Greg has the following utility function: u = x0.55x0.45. He has an income of $96.00, and he faces these prices: (P1, P2) (10.00, 8.00). Suppose that the price of x₁ increases by $1.00. Calculate the compensating variation for this price change. Give your answer to two decimals. $ =