David consumes two things: gasoline (91) and bread (42). David's usility function is U(91.92)-900,0.05 Let the price of gasoline be p,, the price of bread be py, and income be Y. Derive David's demand curve for gasoline. David's demand for gasoline is 91 character) (Property format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the

David consumes two things: gasoline (91) and bread (42). David's usility function is U(91.92)-900,0.05 Let the price of gasoline be p,, the price of bread be py, and income be Y. Derive David's demand curve for gasoline. David's demand for gasoline is 91 character) (Property format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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quantity of bread 100 90 80 70 60 50 40 30 20 10 B 10 20 30 40 50 60 7080 quantity of apples Juan is a consumer of apples and bread. Juan shifts his consumption bundle from point B to point A. Which of the following is true? Juan's demand curve for apples shifted left and demand curve for bread shifted right. Juan's demand curve for both apples and bread shifted right. Juan's demand curve for apples shifted left and demand curve for bread shifted left. Juan's demand curve for apples shifted right and demand curve for bread shifted left.
Suppose we are able to model the total utility function for the consumption of two goods, good x and good z. The utility function is structured as U(x, z) = 3x2 + z2 - 2xz. The consumer is faced with the prices of goods x and z. The price for each unit of good x and z is $1 each. The consumer has an income $1 (in thousands). How many units of each good should the consumer consume so as to maximize his/her utility?
Joe's income is $100 a day and he currently buys two goods: fresh fruit (F) and cheese (C). The price of a unit of fresh fruit is $4 and the price of a unit of cheese is $5. (Assume that cheese is measured on the y-axis and fresh fruit is measured on the x-axis.) Which of the following statement is TRUE? Select one: If Joe spends all his income on cheese he can purchase 25 units of cheese Ob The opportunity cost of one unit of fresh fruit is 1.25 units of cheese Oc Joe would trade one fresh fruit for 0.8 unit of cheese Od. If Joe spends all his income on fresh fruit he can purchase 20 units of fresh fruit
2. Vibha consumes three goods X, (shirts), X, (food in pounds), and X, (shelter in square feet). Vibha's utility function is given by: U (X,, X, X,) = 5ln Xt 3ln X + 2ln X, where In (x) or log. (x) is the natural logarithm. Vibha's weekly income is $100. Let the price of X, = P, = $10, the price of X, = P, = $2, and the price of X, = P; = $4. What is the equation for Vibha's budget constraint? а. b. |How many shirts, pounds of food, and square feet of shelter, will Vibha consume, as a rational consumer?
Please answer both Thank you
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
8. Fabian consumes X and Y and the following utility function represents his utility: U = 2XY a. With a utility function of U = 2XY, Fabian's MU, = 2Y and his MU, = 2x ,where MU is marginal utility. Write an equation for Fabian's marginal rate of substitution (MRS). b. Suppose Fabian's income is $120 and Px = S6 and Py-$2, where Px is the price of X and Py is the price of Y. Write an equation for Fabian's budget constraint. c. Write the equation that equates the slope of Fabian's budget constraint to the slope of Fabian's indifference curve: d. If Fabian is spending all of his income, how much X and how much Y will he choose? Use the equations you wrote in part's b and c to answer this question. e. What will Fabian's utility be with this combination of X and Y? f. Now suppose the price of X increases to P.=10. Write the equation that equates the slope of Fabian's budget constraint to the slope of Fabian's indifference curve. How will this change the optimal combination of X and Y? What…
A consumer is choosing between magazines and books. His set of čonsumer optimums are shown on the graph to the right. 50 Consumer income allocated for these two goods is equal to $150. The price of magazines (P,) is equal to $5.00. 45- 40 How do these changes in the price of books affect the demand for magazines? 35 demand remains constant 30- We can consider books and magazines to be goods. 25- 20- 15- PCC substitute 10- 5- complementary 0- O 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 unrelated Books O étv 21 MacBook Air DII 80 F10 F11 F7 FB F9 F6 F4 F5 F3 F1 F2 * @ # $ 7 8 9 1 2 4 P T Y Q W J K S F く Z C V command oF option command O 回 .. - つエ B ** A.
44. Assume the graph shown shows Bobbi's budget constraint. If hairbands cost $5, then Bobbi's income to spend on these two items must be: Q earrings 5 4 3 2 1 2 4 6 8 Q hairbands Assume Bill's income to spend on the two goods in the graph shown is $48, and movie tickets cost $8. If Bill's budget constraint is one of the lines in the graph, which one must it be?
Steve spends all his income on meals at restaurants and paperback novels. His usual restaurant meal costs $20, and paperback books cost $10. When Steve’s monthly income is $250, he goes out to eat 10 times and purchases 5 books. When his income rises to $280, he goes out to eat 8 times and purchases 12 books. Determine whether the following statements are true or false: Paperback books are normal goods Restaurant meals are necessity goods Paperback books are luxury goods