Consider two commodities: toy cars and batteries. Each toy car takes three batteries to operate. Suppose Andy enjoys a toy car only if it moves and Andy has no other toy that needs battery. That is, one toy car and three batteries are a set of perfect complements to Andy. Task 1: Let x1 >= 0 be the quantity of toy cars and x2 >= 0 be the quantity of batteries. FindafunctionU(x1, x2)that representsthispreference. Task 2: Draw Andy's indifference curves going through bundles (2, 3), (4, 3) and (5, 5) in the commodity space in the same graph. How does Andy's preference order these 3 bundles in terms of> or ~? Task 3: What mathematical expression describes the line formed by all the corners of the indifference curves?

Consider two commodities: toy cars and batteries. Each toy car takes three batteries to operate. Suppose Andy enjoys a toy car only if it moves and Andy has no other toy that needs battery. That is, one toy car and three batteries are a set of perfect complements to Andy. Task 1: Let x1 >= 0 be the quantity of toy cars and x2 >= 0 be the quantity of batteries. FindafunctionU(x1, x2)that representsthispreference. Task 2: Draw Andy's indifference curves going through bundles (2, 3), (4, 3) and (5, 5) in the commodity space in the same graph. How does Andy's preference order these 3 bundles in terms of> or ~? Task 3: What mathematical expression describes the line formed by all the corners of the indifference curves?

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

Explain how the consumer decides how many units of a good to consume by explaining the assumptions of the cardinal approach.
As a consumer you have RM34 per month to spend for snack i.e. either pizzas which costs RM6 each or chicken burger which cost RM4 each. Suppose further that your preference is given by the following Total Utility Table Quantity 1 2 3 4 5 6 7 Pizza 60 108 138 156 162 166 166 Chicken Burger 44 76 100 120 136 148 152 First, graph the budget constraint with Pizzas on the horizontal axis and Chicken burger on the vertical axis. What are the intercepts at horizontal axis and vertical axis. Using the table, please show the Marginal Utility of Pizzas and Chicken Burger for every quantity demand. Using the utility maximizing rule to identify the consumer equilibrium, that is, combination of pizzas and chicken burger that will maximize your Total Utility. Confirm that the consumer equilibrium generates the highest combined total utility of any affordable combination of goods.
Problem 1 Last week, neither Alistair nor Bodana purchased blueberries (x). Both consumers had $30 to spend on blueberries and/or raspberries (y), the price of the two fruits was $3 per pack and both consumers bought raspberries only. Alistair's utility for blueberries and raspberries is UA(x,y) = x+2y. Bodana's utility for blueberries and raspberries is UB(x,y) = x +12ln(y). a) In two separate graphs, illustrate Alistair's and Bodana's optimal choices. Your graphs must illustrate the consumers' budget constraints and their indifference curves at the optimal bundle. b) At their optimal bundle, what is Alistair's marginal rate of substitution of raspberries for blueberries (- MUx/MUy)? At their optimal bundle, what is Bodana's marginal rate of substitution? This week, blueberries cost $3 per pack just like last week, however raspberries now cost $4 per pack. c) How many packs of blueberries and raspberries will Alistair buy this week? Clearly justify your answer. d) Using the…
Ginny likes to eat Bertie Bott’s Every Flavour Beans (b), and Chocolate Frogs (f). Herpreferences over these lollies are Cobb-Douglas, and can be presented by the utility functionu(b, f) = 1/5(b − 2)(f + 3). Each Every Flavour Bean costs 25 Knuts and each Chocolate Frogcosts 12 Knuts. Ginny has 314 Knuts to spend. Assume that beans and frogs are both perfectlydivisible goods.(a) Find Ginny’s optimal bundle.(b) Suppose that Ginny is mugged by Draco on her way to the lolly cart, so that by the timeshe is there, she is left only with 75 Knuts. What is her optimal bundle now?(c) Now, consider the general case, where Ginny’s income is m, the price of Every FlavourBeans is pb, and the price of Chocolate Frogs is given by pf . In other words, treat ChocolateFrogs as the numeraire. Find Ginny’s demand for each good in terms of m, pb and pf .(d) Find the good on which Ginny will always spend more than half of her income.(e) Find the own-price, cross-price, and income elasticities of good 2…
Suppose the price of a donut is $2.50, the price of a cinnamon roll is $3.20, and the budget is $50. Donuts are on the x-axis and cinnamon rolls are on the y-axis. If the price of a donut increases to $3.30, what happens to the Budget Line? The budget line undergoes a parallel shift outward The budget lines undergoes a parallel shift inward The budget lines rotates outward The budget lines rotates inward
1.2 Ann and Bob each own 10 bottles of beer and, altogether, they own 20 bags of peanuts. There are no other people and no other goods in the economy, and no production of either good is possible. Using a to denote bottles of beer and y to denote bags of peanuts, Ann's and Bob's preferences are described by the following utility functions: UA (XA, YA) = TAYA and UB (XB, YB) = 2xB+ YB. In each of the following cases, determine the market equilibrium price ratio and allocation and depict the equilibrium in an Edgeworth box diagram. (a) Bob owns 20 bags of peanuts and Ann owns no peanuts. (b) Bob owns 15 bags of peanuts and Ann owns 5 bags. (c) Ann owns 20 bags of peanuts and Bob owns no peanuts.
In the diagram to the right, we have five different combinations of movies and books. Combination A represents 2 movies and 3 books. Combination C represents more books (7) and the same number of movies (2). Points B, E, and F are other combinations with more movies, more books, or more of both. When compared to combination A, combination B provides satisfaction to the consumer. When compared to combination F, combination B provides satisfaction to the consumer. When compared to combination A, combination F provides satisfaction to the consumer. These conclusions are based on what assumption about preferences? Books 10- 9- 8- 7- 6- 4- 3- 2- 1- 0- 0 1 C A 2 3 E 4 5 Movies LL B 6 7 8 9 Next
We 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.
Solution sent me 20 very fast
please only do: if you can teach explain steps
Assume that, a consumer has $1200 to spend on two goods, X and Y. If the price of a pair of good X is $20 per unit and the price of good Y is $15 each, which of the following combinations that the consumer can purchase from good X and Good Y?