Consider a consumer whose preference is represented by the utility function u(x₁, x₂) = ln(x₁+1) + x₂ where good 2 represents all other goods. Suppose the consumer's income is m > 1, let p2 = 1. a) Derive x₁(p₁, m), the consumer's demand function for good 1. b) Letting m = 10, graph the consumer's demand curve, with x₁ on the horizontal axis and p₁ on the vertical axis. c) Suppose that at first the price of good 1 is p₁ = 1, but then the price rises to p₁ = 1. What is the loss of consumer surplus associated with this price increase?

Q: What are some currencies of great value in a workplace that is in high demand? List at least 3 and…

A: Commonly, the value of different currencies around the global financial market keeps on changing…

Q: The return a lender receives for allowing borrowers the use of their savings for one year,…

A: Disinflation is the decrease in inflation rate over years.  Real interest rate is the rate of…

Q: As a lender/depositor, how would you compare time to demand deposits?     Demand deposits are more…

A: Meaning of Demand Deposit: The term demand deposits refer to the situation under which an…

Q: What is the difference between “usury” in the Old Testament and in current business law? Do you…

A: Old Testament Usuary The Old Testament "condemns the practise of charging interest on a needy person…

Q: Is barter becoming more or less prevalent in the US economy? Why?

A: Money didn't exist once upon a time. People would simply request the items they wished, and in…

Q: Name any two quantitative tool to control credit creation in an economy

A: The measures which manipulates the overall volume of the credit flow in an economy are term to be as…

Q: How does an increase in the money supply get into the hands of consumers? What do they do with it?

A: The total stock of currency and liquid form of instruments circulating in a nation at a particular…

Q: ge anson Business in a neighboring sta ality. Has Hilga realized income? If so, when 7 How much…

A: Tax is the mandatory payment that is paid by every individual in the country, There are various…

Q: It tells me these are not correct either

A: The internal growth rate is a financial metric that represents the maximum rate at which a company…

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.