Charlie's utility function is(1-a)AXA BAx^xU(x4, XB) =%3DwhereA > 0 and a > 0are positive parameters. What is the own price elasticity of Demand for goodXAO infiniteO-2O-1

Answer : -1 We derive the demand function of good xA from the utility function and find elasticity.

Answered: Charlie's utility function is U(xA, XB)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Ursula's utility function is In(x) + 6y, her income is 12, and both prices are 1. (a) What is her demand for x? (b) What is her own-price elasticity for x? (c) What is her income elasticity for x?
TRUE OR FALSE *If change in quantities demanded and supplied is greater than the change in price, then they type of elasticity of D and s is elastic. *Good has unitary type of elasticity id change in quantities demanded and supplied are equal. *If the product has more close substitutes, the elasticity demand and supplied is inelastic.
3
An individual has the following utility, U = In X + 2 In Y. What do we know about the Marshallian and Hicksian demand elasticities of good x with respect to the price of x? O a. Marshallian elasticity ex.p, will be more negative than Hicksian elasticity ep. O b. Marshallian elasticity ex.p. will be less negative than Hicksian elasticity ep. c. Marshallian elasticity ex.p. will be the same as Hicksian elasticity e.p. O d. Marshallian elasticity and Hicksian elasticity will have opposite signs. Clear my choice An individual has utility function U(X, Y) = X1/5 Y 23. Which of the following is true? O a. Demand for X and Y have constant expenditure shares s and sy. O b. The income effect for both goods is 0. O c. X and Y are net complements. O d. The own-price substitution effect of x (dhldpx) is 0. Clear my choice
I need the answer as soon as possible
i am not sure not is the answer to this question
Attina's sister, Aquata always spends 20% of her income on boots. Assume that her income increases by some percentage while the price of boots remains constant (and that all boots cost the same). What is her income elasticity of demand for boots? O 0.2 need more information to tell 0 1
1. Suppose that a representative individual has the following utility function U(x,y) = xªyß The price of good x is Php 40 and the price of good y is Php 20. The individual's income is Php 160. a. Calculate the uncompensated own-price elasticity of demand for good x and identify if it is price elastic, inelastic, or unit elastic. b. Calculate the uncompensated cross-price elasticity of demand for good x with respect to the price of good y and interpret your results.
O X₁ V -IC, IC₂ IC, X₂ B X, X, B, B₂ (a) Are goods X and Y substitutes or complements? Explain. B₂ X (b) Let Y refer to all other goods. Is the demand for good X elastic or inelastic? Explain.
When a good or service faces an inelastic demand curve, a change in price will have a small effect on the quantity demanded. O True False
Two goods are complements when a decrease in the price of one good O decreases the quantity demanded of the other good. O decreases the demand for the other good. O increases the quantity demanded of the other good. increases the demand for the other good.
F9

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

Charlie's utility function is U(xA, XB) = Axªx-) (1-a) A B where A > 0 and a > 0 are positive parameters. What is the own price elasticity of Demand for good XA O infinite O-2 O-1