David’s utility function for good X and Y is given by ( x,y )= x²y³ . Where Px, Py and I are the price of good X, price of good Y and consumer income respectively. a. Write the budget Constraint of the consumer. b. Drive the demand functions for good X and Y c. What combination of X and Y maximizes the consumer’s at I=100, Px= 4, Py=5

David’s utility function for good X and Y is given by ( x,y )= x²y³ . Where Px, Py and I are the price of good X, price of good Y and consumer income respectively. a. Write the budget Constraint of the consumer. b. Drive the demand functions for good X and Y c. What combination of X and Y maximizes the consumer’s at I=100, Px= 4, Py=5

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 25SQ

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David's utility function for good X and Y is given by U (X,Y) =X2y3. Where px,py and I are the price of good X, price of good Y and consumer income respectively. A. Write the budget constraint of the consumer and derive the demand function for good X and Y b: What combination of X and Y maximizes the consumer at I=100,px=4,and py=5 c. Calculate the marginal rate of substitution between X and Y at equilibrium and interpret your results.
The utility function of a consumer is given as follows. U(x, y) = x²y³, MU, = 2xy3 and MU, = 3x?y?. a. Derive the demand functions for good x and good y. b. Draw a demand curve. Draw an Engel curve. Is good x a normal good? С.
a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese meals and use the utility maximization conditions to find the demand for Vietnamese food of the typical consumer (keep in mind that since utility is quasi-linear, you can find demand without information about the consumer’s weekly budget). b) Sum across consumers to find the weekly market demand for Vietnamese meals in NYC.
Consider a consumer whose utility function is (screenshot) Assume the consumer has income $120 and initially faces the prices px=$1 and py=$1. How much x and y would they buy? Draw the budget constraint and the demands.
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Biwei’s utility function U=4XY, where X is consumption of beer and Y is consumption of pizza. For this utility function, the marginal utility of X is MUx = 4Y; the marginal utility of Y is MUY = 4X. 1) Suppose Y = 3. Calculate Biwei’s utility for X = 2, 3, 10, and 11. For a given level of Y, does good X display diminishing marginal utility? 2) Suppose X = 3. Calculate Biwei’s utility for Y = 2, 3, 10, and 11. For a given level of X, does good Y display diminishing marginal utility?
A consumer with I dollars budget has the utility u(x,y) = x(y+1) over amounts of cake (x) and ice cream (y) she consumes. The prices are px , py respectively. (a) Derive her demand for cake (x), as a function of prices px , py and her budget I. (b) Looking at the demand function in (a), is cake a normal good or an inferior good? Are cake and ice cream complements or substitutes? (c) Calculate the (i) (own) price, (ii) income, (iii) cross- price elasticity of demand for cake at the point where I = 80, px =10, py = 20.