Consider the following utility function:хуU(x,y) =y%3Dх — у(a) Derive the MRS of x to y. Show your work.(b) Is this function quasi-concave? [Hint. You need to check the conditions for quasi-concavity].

Answered: Consider the following utility…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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if the utility function is given by u=x^2y^2 what is marginal utility?
When John maximizes his utility, his consumption bundle is (2 burgers, 3 burritos) and his marginal utility for burger and burrito are 30 and 20, respectively. Assuming burgers and burritos are neither perfect substitutes nor perfect complements for John. The price of burger must be higher than the price of burrito. Please do fast ASAP fast
Suppose the preferences of an individual are represented by a quasilinear utility function: U(x, y) = In(x) + 3y a) Initially, Px=1, Py=6 and 1=102. Then, the price of x increases to 2 (Px=2). Calculate the changes in the demand for x. Please also calculate the substitution and income effects of the change in Px on x. (Hint: since the change in price is not small, you cannot use the Slutsky equation. You need to have numbers instead of functions as the answer.) B)Please also calculate the substitution and income effects of the change in Pr on y. C) Instead of doubling to 2, suppose Px is only increased by a small amount. Use the Slutsky equation to find the substitution and income effects of the change in the price of x on x. Compare your result to (a). Explain why there's no income effect of the change in Pa On X. Show your result on an indifference curve. d) Use the Slutsky equation to find the substitution and income effect of the change in Px on y. Compare your result to (b).
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Consider the following utility function: ху υ(x, y) х —у (a) Derive the MRS of x to y. Show your work. (b) Is this function quasi-concave? [Hint. You need to check the conditions for quasi-concavity].
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Consider the following utility function: ху U(x,y): х — у (a) Derive the MRS of x to y. Show your work. (b) Is this function quasi-concave? [Hint. You need to check the conditions for quasi-concavity].