Ben gets utility from apples and bananas and his preferences can be represented by the utilityfunction U(A,B)=4A+B. If the price of apples is 3 times the price of bananas, what is Ben'sordinary demand function for apples, A*(p A, P B, I)?OA (P A, PB, 1)=0A*(p A, P B, 1)=1/P AOA (P A, PB, 1)=21p AOA (P A, PB, 1)=1/(3p A)O A*(p A, P B, 1)=1/(4p A

Option a) A∗(pA,pB,I)=0: This option is incorrect because it implies that regardless of the cost…

Answered: Ben gets utility from apples and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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?
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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
Ricky has utility function u=x'y. This implies that MUx=2xy. MUy=x². His income is 100. The price of y is 10. (a) Find his demand for x at price 20. (b) Find his demand for x at price 30. (c) Write down his demand function for x: that is, write down his demand for x as a function of the price of x.
Alice receives an allowance of 500 dollars that she spends on buying snacks (S) and tea (T). The price of each snack is 10 dollars and the price of each tea is 5 dollars. Her utility is given by: U (S, T) = 2S³/4 +T3/4 (a) Find her marginal rate of substitution (MRS) between S and T. (b) Write Alice's budget constraint. (c) Find Alice's optimal consumption and the optimal A. (d) What is her new consumption if the price of tea becomes 10 dollars? Note: numeric solutions for questions (c) and (d) are not integers.
Consider Gary's utility function: U(X,Y) = 5 XY, where X and Y are two goods. If the individual consumed 10 units of X and received 250 units of utility, how many units of Y must the individual consume? 5 25 0 10
Yam has the following utility function for Apples (X1) and Ice Cream (X2), U(X1,X2) = Min{3X1,X2}. Yam likes to get more of both Apples and Ice Cream. Suppose Yam has an income of M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on Ice Cream. Yam's after tax optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better…
Andy purchases only two goods, apples (a) and kumquats (k). He has an income of $1,000 and can buy apples at $10 per pound and kumquats at $10 per pounc utility function is U(a, k) = 4a + 3k. What is his marginal utility for apples and his marginal utility for kumquats? Andy's marginal utility for apples (MU) is MU, = and his marginal utility for kumquats (MU) is MU, = (Enter your responses as whole numbers.) What bundle of apples and kumquats should he purchase to maximize his utility? Andy should consume apples and kumquats. (Enter your responses as whole numbers.) React tv MacBook Air 80 DI DD F1 F2 F3 F5 F6 F7 F8 F9 F10 @ #3 $ % & 1 2 4 7 8. 9 Q W E Y { A S F G H. J C V M ption command command option .. .. V B
Suppose the function for the utility from good c is denoted as U(c)=2c1/2 . Which of the following expressions indicates the marginal utility of c?

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