not use ai please Bonus Question (Optional w/ Extra Points)Consider a simple utility function of the form: U(x, y) = xªy¹-a.=a) Solve the expenditure minimization problem and use your solution to show that theexpenditure function for this person is E(px, Py, u) K¹uppy, where K is someparameter in terms of a, and u is the threshold utility level in the expenditure mini-mization problem.b) Compute the Hicksian demand function for good x.

Part (a) Expenditure Minimization Problem Part (b) Hicksian Demand for Good xThe Hicksian demand…

Answered: Bonus Question (Optional w/ Extra…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.13P

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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).
Question 888 Full explain this question and text typing work only thanks
1. Suppose someone's budget is $780, and it is fully spent on buying Product A. The price of this product is $26. Calculate the price change of Product A if there is a 1.3 times increase in the quantity available to purchase. Enter your answer in the box below, use a minus sign to show a decrease in price, and round to the nearest whole number if necessary. 2. Consider the spending choices of the following consumer: Emily's income is spent on colas and orange sodas, as well as other goods. She considers colas to be a normal good and orange sodas to be a normal good. What will happen to Emily's purchases of these goods if her income decreases? Select the best answer. She will buy more colas and fewer orange sodas.She will buy fewer colas and fewer orange sodas.She will buy more colas and more orange sodas.She will buy fewer colas and more orange sodas. Is the following statement true or false? Select the best answer. The price ratio of coffee to cookies is 1.5, so the marginal utility…
Question: How We Can Check Convexity And Monotonicity Of The Utility Function. How we can check convexity and monotonicity of the utility function.
Mariah consumes music downloads (M) and concert tickets (C). Her utility function is giveh by U = 0.5M? + 2C². a. Using calculus, what is the marginal utility of music downloads? b. Using calculus, what is the marginal utility of concert tickets? Write the equation for the MRSMC (i.e., the MRS of C for M; M is increasing, C is С. decreasing). d. Would the bundles of (M = 4 and C = 1) and (M = 2 and C = 2) be on the same %3D %3D %3D %3D indifference curve? How would you know? e. Calculate the MRSMC when M = 4 and C =1 and when M = 2 and C = 2. Explain why the %3D %3D values of MRSMC differ across these two bundles. f. Based on your answers above, are Mariah's indifference curves convex? Explain using the values calculated. er this
Juice e2 e₁ 15 18 25 B2 Soda 37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.
he Calculus of Utility Maximization and Expenditure Minimization -End of Appendix Problem uppose that there are two goods, X and Y. The price of X is $2 per unit, and the price of Y is $1 per unit. There are two onsumers, A and B. The utility functions for the consumers are UA(X,Y)= X05.05 UB(X,Y)= X0.8y0.2 Consumer A has an income of $100, and Consumer B has an income of $300. Using Lagrangians, solve for the optimal bundles of goods X and Y for both consumers A and B. a. The optimal bundle for consumer A is X = 25 and Y* = 50 - b. The optimal bundle for consumer B is X = 120 and Y* = 60
Would you expect total utility to rise or fall with additional consumption of a good? Why?
Law of equi marginal utility is an important law of cardinal utility analysis. Explain this law with the help of its assumptions. Furthermore, there is a relationship between total and marginal utilities where they both pass through different stages when the consumer continues his or her consumption regularly. Elaborate.
Q50 Marginal utility analysis predicts a downward-sloping demand curve for good X because... a. As PX rises, the consumer increases purchases of X such that MUX/PX is equal to MU/P for all other products. b. As PX falls, the ratio MUX/PX becomes smaller, causing the consumer to purchase more of good X. c. As PX falls, the consumer increases purchases of X until MUX/PX is equal to MU/P for all other products. d. Utility-maximising consumers equate the marginal utility received for each product consumed. e. All demand curves are downward sloping, regardless of the behaviour of consumers.
Exercise Suppose the utility function of a person consuming two commodities X and Ywith income Birr 600 is given by U = 2 X 06Y 04 If the per unit price of X is Birr 20 and per unit price of Y is Birr 40 a) What is the utility maximizing level of consumption of X & Y ? b) Find the MRSyy at the optimum ?

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