assume that both X and Y are goodss.) Consider a person whose preferences can be represented by the utility functionU(X,Y). T/F: "The following function could not possibly represent even a portion of this4.person's Marshallian demand function for X: X"(Px.Py,1) Px 0py 261-25"true/false

We first define the properties of each type of good in terms of price elasticity as well as income…

assume that both X and Y are goods s.) Consider a person whose preferences can be represented by the utility function U(X,Y). TIF: "The following function could not possibly represent even a portion of this 4. person's Marshallian demand function for X: X"(Px,Py,1) = Px 0Py 251- 25 true/false

assume that both X and Y are goods s.) Consider a person whose preferences can be represented by the utility function U(X,Y). TIF: "The following function could not possibly represent even a portion of this 4. person's Marshallian demand function for X: X"(Px,Py,1) = Px 0Py 251- 25 true/false

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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27. Mike spends all his income on films (F) and concerts (C). Films cost $10 and concertscost $30. Mike’s preferences can be described by the utility function: U = F C and hence themarginal utility of films is C and the marginal utility of concerts is F. Which of the followingbundle will Mike purchase? (Hint: You do not need to know income in $ amount. Answerthe question using the tangency condition.)(a) Mike purchases 30 concerts and 10 films a month.(b) Mike purchases 10 concerts and 30 films a month.(c) Mike purchases 20 concerts and 20 films a month.(d) Mike purchases 5 concerts and 10 films a month.
Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M, S) = M2/3S1/3 and his income is m. The price of Chicken McNuggets is p, and the price of Szechuan sauce is 1. d. Use the equation from part (c) and the budget constraint from part (a) to find Rick’s demand for each of the two goods. e. Suppose m=100 and p=1. How much of each good does Rick consume? Draw a graph showing Rick’s budget constraint and indifference curve passing through his chosen consumption bundle. f. Suppose m=100 and p=2. How much of each good does Rick consume? On the same graph from part (e), show Rick’s budget constraint and indifference curve passing through his new chosen consumption bundle.
Guerdon always puts half a sliced banana, q, , on his bowl of cereal, q, The two 14 goods are perfect complements. What is his utility function? Derive his demand curve for bananas graphically and mathematically. 12- 10- e, Guerdon's utility function (as a function of q, and q2) is 6- VA U= min/2q1.92} 4- O B. U=q, +92- 2- 0+ OC. U=29, + q92- 10 12 14 16 18 20 6 22 Bananas O D. U=0.5q1 + q2- OE. U=q, xq2- 5.00- 4.50- Guerdon's demand function for bananas (as a function of the price of bananas, P1. the price of a bowl of cereal, p2, and income, Y) is 4,00- 3.50- 91 = (p1 + 2p2) (Properly format your expression using the tools in the E 3.00 palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the_ character.) 2.50- * 2.00- P. 1.50- 1.00- 0.50- 0.00+ 10 12 14 Bananas tv 80 DI DD F1 F3 F4 F5 F6 F7 F8 F10 @ %23 $ & 1 3 4 7 Q W E Y U S F H. J く C V M option command command optic ーの * CO Cereal (bowls) p. S per banana B * * N A
Suppose that U(f,c) = f + 8c^(1/2)is a utility function that describes Amelia’s preferences over two goods: fish(f)and custard (c). For the following, think of fish as the good graphed on the horizontal axis.a. Derive an expression for her marginal utility (Uf)from a small increase in f holding c fixed. Also find themarginal utility for custard (Uc).b. What is Amelia’s marginal rate of substitution (MRS)? Give a brief (2 sentences maximum) intuitivedescription of what MRS represents. If Amelia has 4 units of custard, holding her utility constant, howmany units of custard would she be willing to give up in order to get one more unit of fish?c. Graph Amelia’s indifference curve for a utility level of 40. Be sure to specify at least 3 bundles of goodson the indifference curve.d. Does the fact that Amelia’s indifference curve intersects with the custard axis violate any of the 5properties of indifference curves? Briefly support your answer.e. Give another utility function that represents…
4. If we have the utility function, U(x)=(x−7)^2, and we know that there is an indifference set around x = 4 and an upper contour set of x = 6. How to graphically represent this function? I'm confused about how to draw the upper contour set on the graph? I know the concept that upper contour is the area over the convex line, but don't know how to put it on the graph. Could you draw a simple graph to help me identify the upper contour?
*2.2 Guerdon always puts half a sliced banana, q₁, on his bowl of cereal, 9₂ -the two goods are perfect complements. What is his utility function? Derive his demand curve for bananas graphically and mathematically. (Hint: See Solved
Cobb-Douglas Preferences] Asad lives in a world with two goods (N=2), apples and bananas. He has a Cobb-Douglas utility function over these goods U(a, b) = a 0.7 b 0.3 . Asad has an income I = 200, and faces prices pa = 2, pb = 1 (a) We know that if Asad is optimizing (and consumes a bundle that contains both apples and bananas), that the slope of the budget constraint should be equal to his MRS. Use this and his budget constraint to solve for his optimal bundle. (b) Suppose the price of apples rises to 4, and the price of bananas rises to 3. What is his new optimal consumption bundle? (c) Suppose Asad instead had a utility function given by U(a, b) = a 1.4 b 0.6 + 1. Given the same prices and income as in part (b), what is his optimal bundle?
12) A consumer’s preferences are given by U(X,Y) = X0.6Y0.4. The price of X is 4, and the price of Y is 5. The consumer has an income of $2000.a) What is the utility maximizing choice of X and Y?b) How would the utility maximizing choice change if price of X falls to 3 because of a pricesubsidy?c) Given the answers to the previous parts plot a linear demand function for X.d) Show that the consumer would prefer the cash equivalent of the price subsidy in part b.
Suppose Rosie's marginal utility from attending her 5th Atlanta Braves game was 40 and the marginal utility from attending her 1st Taylor Swift concert was 200. Assume that the price of a Braves ticket is $20 and the price of a Taylor Swift ticket is $120. Which of the following would be TRUE? 1) Rosie would attend more Taylor Swift concerts and fewer Braves games. 2) Rosie would attend more Braves games and fewer Taylor Swift concerts. 3) Rosie would not alter her behavior. 4) Rosie would attend less of both Braves games and Taylor Swift concerts.
Question In the utility function above, x and y are substitutes.The Consumer Maximization Problem is as follows:Max(x;y)=5x + 6y subject to x + 2y = 10, We know MRSxy=5/6, find it by setting U(x, y) = U¯ and solving the utility function for y and what is the price ratio? Full explain this question and text typing work only thanks
The utility-maximizing bundle of x and x2may, in some instances, be found at a point of tangency between the budget line and an indifference curve. In other instances, the utility-maximizing bundle will be found at a corner point-that is, where the quantity consumed of one good is zero. For which types of indifference curves shown below will the utility-maximizing bundle definitely be found at a corner point? Choose one or more: A. B. "C. D.
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.