Diogo has a utility function,0.2. 0.8U(q,, 42)=q,42°where g, is chocolate candy and g, is slices of pie. If the price of slices of pie, p2, is $1.00, the price of chocolate candy, P4, is $0.50, and income, Y, is $100, what isDiogo's optimal bundle?The optimal value of good q, is9, = units. (Enter your response rounded to two decimal places.)15tvMacBook Air80escDIIF1F2F3F4F5F7F8@23%&1234679QWERYtabSFHK.s lockXCVMcontroloptioncommand* CO8 :BDNA

Optimal condition is that condition where MRS is equal to price ratio.

Answered: Diogo has a utility function, U(a,, 92)…

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

Suppose Carlos has to choose between purchasing jewelry and water. Which of the following is the utility-maximizing rule that Carlos should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Water) x (Price of Water) = (MU of Jewelry) x (Price of Jewelry) O MU of Water = MU of Jewelry MU of Jewelry %3D Price of Water MU of Water Price of Jewelry MU of Jewelry Price of Jewelry MU of Water %3D Price of Water Since water costs little and jewelry is expensive, it must follow that when people choose their optimal quantities of water and jewelry to purchase, the marginal utility they receive from the last piece of jewelry they buy is than the marginal utility they receive from the last gallon of water they buy.
Diogo has a utility function, U(q, , 92) = q, 0²q, 0.8, where g, is chocolate candy and q, is slices of pie. If the price of slices of pie, p2, is $1.00, the price of chocolate candy, p1, is S$0.50, and income, Y, is $100, what is Diogo's optimal bundle? The optimal value of good q, is 9, = 40 units. (Enter your response rounded to two decimal places.) The optimal value of good q, is 92 = units. (Enter your response rounded to two decimal places.) aho shortcut étv 15 MacBook Air DII 08 F3 esc F5 F1 F2 ! @ # $ & 3 4 5 7 8 Q W R IT Y 一 tab A S F K caps lock C V M shift fn control option command しのつつエレ

Q.7 A consumer's utility function is given by the expression: U = (0.6A"' + 0.47'"s} Determine the marginal utility functions for each commodity. Does marginal utility decrease when consumption increases? Assuming that the price of good X is Rs 15 and the price of Y is Rs 6, write the equation of the budget line and plot it when income is Rs 450. What is its slope? What does it indicate? Calculate the marginal rate of substitution of Y for X and interpret its economic meaning. Write the equation showing consumer's equilibrium condition. Obtain the equilibrium values of X and Y. Find the expressions for change in MUx due to increase in Y and change in MUy due to increase in X.
Sally consumes two goods, X and Y. Her utility function is given by the expression U = 2XY3. The current market price for X is $20, while the market price for Y is $10. Sally's current income is $500. a. Write the equation for Sally's budget constraint. What is the slope of her budget line? b. Determine the X,Y combination which maximizes Sally's utility, given her budget constraint.
K Diogo has a utility function: U = 100x0.9 20.1 The price of X is p, = $10, the price of Z is p₂ = $4, and his income is $1,200. What is Diogo's optimal bundle? (round your answer to one decimal place) Xo Z₂ = units units
Suppose Alex’s utility function for apple and orange is U(a,o) = a^2o. The price of an apple is $ 4, and the price of an orange is $ 2. Alex has $ 120 to spend on these two goods. – at the bundle (a,o) = (4,2) the marginal rate of substitution MRS(a,o) = ____ – Given prices, income, and utility function, the best affordable bundle for Alex is a∗ = __ and o∗ = __
The price of salad is ps = 10, the price of green juice is pg = 5, and Tom’s income is I = 100.
A consumer’s preferences over pizza (x) and steak (y) are given by u(x,y) = x^2y (HINT: MUx = 2xy and MUy = x2) and his income is I = $120 and py = $1. (a) Calculate his optimal bundle when pX = $8 (call this bundle A) and separately when pX = $1 (call this point C). (b) Finding the decomposition bundle B, calculate the income and substitution effects on the amount of pizza of a decrease in the price of pizza from pX = $8 down to pX = $1. (c) Forget about the decomposition bundle and the two effects. In (a), the price of pizza decreases, hence the agent ends up better off. Let’s quantify how much “better off” the agent becomes after this price drop, in dollars. For this, instead of the price drop, suppose the agent is given some money $m and he optimize utility with this additional gift included to his budget. What should m be, so that his optimal utility with his expanded budget is exactly equal to his utility at the bundle C (the bundle he chooses optimally when pizza price drops to…
Suppose the utility function of U(x1, x2) = x11/2x21/2 and the budget constraint of p1x1+p2x2=m. Let’s assume that p1=$1.5, p2=$2, and m=$60. Find the optimal bundle. Also, specify the optimal bundle.
A consumer’s preferences over pizza (x) and steak (y) are given by u(x,y) = x2y (HINT: MUx = 2xy and MUy = x2) and his income is I = $120 and py = $1. (a) Calculate his optimal bundle when pX = $8 (call this bundle A) and separately when pX = $1 (call this point C). (b) Finding the decomposition bundle B, calculate the income and substitution effects on the amount of pizza of a decrease in the price of pizza from pX = $8 down to pX = $1. (c) Forget about the decomposition bundle and the two effects. In (a), the price of pizza decreases, hence the agent ends up better off. Let’s quantify how much “better off” the agent becomes after this price drop, in dollars. For this, instead of the price drop, suppose the agent is given some money $m and he optimize utility with this additional gift included to his budget. What should m be, so that his optimal utility with his expanded budget is exactly equal to his utility at the bundle C (the bundle he chooses optimally when pizza price drops to…
Please answer all the questions below Leonidas has a utility function u(x, y) = x + 3y, an income of 12 and works in Sparta, where the prices of x and y are both 2.(a) What is Leonidas’ current utility?(b) Leonidas’ boss is thinking of sending him to Athens where the price of x is 1 and the price of y is 4. Leonidas says this is as bad as a cut in pay of γ. What is γ equal to?(b) He also says that he wouldn’t mind moving if his pay was increased by δ when he moved. What is δ equal to?
Diogo has a utility function where A, α, and ß are constants, B is burritos, and Z is pizzas. If the price of burritos, , is $2 and the price of pizzas, is $1, and Y is $100, what is Diogo’s optimal bundle? C

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS