Consider imperfect substitute goods. On a graph, we know that the optimal bundle is chosen where the in What else is true at the optimal bundle? Select all that apply. The consumer chooses a bundle where MRSxy=MRTxy. The consumer chooses a bundle where MUX/Px = MUY/Py. The consumer chooses a bundle where the marginal utility per dollar spent The consumer chooses a bundle where the marginal utility is at it's highest The consumer chooses a bundle where price per unit is minimized. The consumer chooses a bundle where MUX/MUy is maximized.

Consider imperfect substitute goods. On a graph, we know that the optimal bundle is chosen where the in What else is true at the optimal bundle? Select all that apply. The consumer chooses a bundle where MRSxy=MRTxy. The consumer chooses a bundle where MUX/Px = MUY/Py. The consumer chooses a bundle where the marginal utility per dollar spent The consumer chooses a bundle where the marginal utility is at it's highest The consumer chooses a bundle where price per unit is minimized. The consumer chooses a bundle where MUX/MUy is maximized.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. John has a utility for the quantity of sandwiches, Xs, and quantity of burgers, Xp, that he consumes, represented by the following equation: U(X,X) = XX His income is Y = $24. The price of a sandwich changes from X, = $1 to X, = $4 while the price of a burger remains at X, = $6. Solve for the compensating variation and equivalent variation associated with this price increase.
Which of the following statement is TRUE Group of answer choices As the consumption of a good increases, marginal utility rises, but total utility falls. As the consumption of a good increases, total utility falls and marginal utility falls. As the consumption of a good increases, total utility rises, but marginal utility falls.
Considering the following Diagram of consumer equilibrium, answer the following questions. If consumer has $100 to spend on X and Y at Budget line DE, what are the prices of X and Y products. What combination of X & Y maximizes the consumer’s total utility at Budget line DE? Why a consumer has moved to point B on Budget line DE1 from Point A of Budget line DE? Derive the demand curve of X product. What is relationship between X and Y products
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When does marginal utility become 1) Negative 2) zero Explain
Larry and Teri allocate their consumption between two goods: hats and bats. The price of hats is €5 each, and the price of bats is €10 each. For Larry, the marginal utility of the last hat consumed was 8, and the marginal utility of the last bat was 24. For Teri, the marginal utility of the last hat was 6, and the marginal utility of the last bat was 12. Which consumer is not maximizing his/her utility? How can you tell? How should he/she change their allocation?
4. Suppose that a consumer with the utility function U =X0.25 Y0.75 choses a bundle where X=5 and Y=10. If the prices of the two goods are Px= $1, and Py = $3. Calculate marginal utility per dollar spent on each good. Can this consumer increase utility without increasing expenditure and if so how?
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