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- Consider the figures to the right. Suppose that the individual currently consumes 5 digital apps. What happens to the person's total utility if they reduce their consumption to 4 units? Why does this fact imply that the marginal utility curve cuts through the horizontal axis of the lower figure between the fourth and fifth app consumed? Reducing consumption to 4 apps from 5 apps leaves total utility at utils in the upper , which is the figure. Hence, the marginal utility between these two quantities of apps equals value of the axis in the lower figure. Thus, the marginal utility curve crosses the axis of the lower figure between units 4 and 5. (Enter your responses as whole numbers.) Marginal Utility (utils per week) 6- 4- 22 Total Utility (utils + q r per week) 14- 12- 10- 20 ø Ø 18- 04 0 Downloaded Digital Apps Utilized per Week Downloaded Digital Apps Utilized per Week G QA decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph? Select one: OA. Parallel outward shift of the line OB. Parallel inward shift of the line OC. Decrease the horizontal intercept COD. Increase the vertical interceptc) From the following budget line and the utility function, calculate the amount of two commodities that maximizes satisfaction. What is the maximum amount of satisfaction? 2500= 20X + 30Y U = 300 X0.6Y0.7
- Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $Suppose Lorenzo has a weekly budget of $48 to spend on ranch dressing and peanut butter. Ranch dressing is priced at $4 per bottle, and peanut butter is priced at $6 per jar. If Lorenzo spends his entire $48 on ranch dressing, he can buy jars of peanut butter. buy Use the blue line (circle symbol) to plot Lorenzo's budget constraint on the following graph. Next, use the orange point (square symbol) to shade the area that represents combinations of ranch dressing and peanut butter that are affordable for Lorenzo. Finally, place the black point (plus symbol) on the point on Lorenzo's budget constraint that corresponds to a scenario in which Lorenzo spends $24 on each good. Note: Dashed drop lines will automatically extend to both axes. PEANUT BUTTER (Jars) 24 22 20 18 2 0 + 0 2 4 12 14 16 18 20 22 bottles of ranch dressing. If he spends his entire $48 on peanut butter, he can 6 8 RANCH DRESSING (Bottles) O True False BC, ($48) O Affordable Region $24 on Each What does the slope of…Define the law of diminishing marginal utility. Given an individual’s income and the prices of two or more goods, explain and demonstrate how an individual chooses between the two or more goods in order to maximize total utility. Define the equimarginal principle and explain the logic behind it. Explain how the equimarginal principle can be used to determine the optimal amount of security guards versus helicopters to employ to prevent illegal border crossings.
- To help with his busy schedule, Joe drinks a lot of cappuccinos. In particular, his weekly demand for cappuccinos is: cap = 0.1 M-8 Pcap Where Xcap is the number of cappuccinos drunk per week, Mis Joe's weekly income and Pcap is the price of a cappuccino. (Note that Xcop is an average demand and need not be a whole number). (a) Suppose that income M = 240 euro, and the price is Pcap = 1.5 euro. How many Cappuccino, on average, will Joe drink per week? Suppose that the price increases to Pcap = 1.6 euro. (b) What is Joe's new demand for cappuccinos? What is his total change in demand due to the price change? (c) Given the new price (Pcap = 1.6), how much extra income would Joe need to allow him to continue buying the number of Cappuccinos calculated in part (a), without needing to reduce his demand other goods? (In other words, how much would Joe's expenditure on cappuccinos have gone up if he had continued to buy the number of cappuccinos calculated in part (a)?) (d) Compute the change…II. Your preferences are represented by the utility function U(x₁, x₂) = (x² − x²)0.5 for x₁ > 0, x₂ > 0, and x² > x².For Sara, ramen noodles are a normal good, however Sean considers ramen noodles to be inferior. If Sara and Sean have the same amount of income, Sean's demand for ramen noodles will be less price elastic than Sara's. Please explain why in detail using the substitution effect and income effect graphs.
- minimum of 200 words pleaseElizabeth makes $200 a week at het summer job and spends her entire weekly income on new running shoes and jeans, since these are only two items that provide utility to her. Furthermore,Elizabeth insists that for every pair of jeans she buys, she must also buy a pair of shoes. (without the shoes, the new jeans are worthless). Therefore, she buys the same number of pairs of shoes and jeans in any given week. a) If jeans cost $20 and shoes cost $20 , how many will Elizabeth buy of each?b) Suppose that the price of jeans rises to $30a pair , how many shoes and jeans will she buy?c) To what effect (income or substitution) do you attribute the change in utility levels between part a and part bWe have determined that Jenny's satisfaction from eating a Snickers bar is 30 utils, whereas Sarah's satisfaction from eating a Snickers bar is 15 utils. We also know that Jenny prefers Snickers bars over Milky Way bars. Which of the following statements can we say for sure are true? Drag the true statements to the box. Items (7 items) (Drag and drop into the appropriate area below) Jenny likes Snickers bars twice as much as Sarah does. Sarah likes Snickers bars more than Jenny likes Milky Way bars. Sarah likes Snickers bars more than Jenny does. Jenny likes Snickers bars more than Sarah does. Jenny's satisfaction from consuming a Milky Way bar must be less than 30 utils. There is not enough information to determine who likes Snickers bars the most. The price of the Snickers bar is needed in order to find out who likes it the most.