8. Fabian consumes X and Y and the following utility function represents his utility: U = 2XYa. With a utility function of U = 2XY, Fabian's MU, = 2Y and his MU, = 2x ,where MU is marginalutility. 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 ofY. 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 indifferencecurve:d. If Fabian is spending all of his income, how much X and how much Y will he choose? Use the equationsyou 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'sindifference curve.How will this change the optimal combination of X and Y?What is Fabian's utility with this new combination of X and Y? Is it higher or lower than whenPx=6?g. List two points on Fabian's demand schedule:P

The equilibrium is established where the MUx/MUy = Px/Py

Answered: Fabian With a utility function of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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
1. Consider two consumers, each having income of $300 that can be used to purchase two goods: X and Y. The price per unit of X is $5, and the price per unit of Y is $4. Ms. A’s preferences can be described by the utility function: U = (X^2)Y and her marginal rate of substitution is given by MRS X,Y = 2Y/X. Mr. B’s preferences can be described by the utility function: U = X(Y+100) and his marginal rate of substitution is given by MRS X,Y = (Y+100)/X. Calculate the amounts of X and Y each of these consumers will purchase if each is trying to make her- or himself as well off as possible.
A consumer is always indifferent between one unit of good A and one unit of good B, no matter how much A or B she consumes. Initially A is cheaper. Then, the price of good A increases, but it is still cheaper than B. Discuss the substitution, income and total effect of this price change.
Joan has the following utility function: u(x, y) = 5x + 3y. Consider that income is I = $8, and prices are given as pa = $4, p = $2. (e) Assume the price of y increases to 4. Find the total, income and substitution effects for x. Consider this price change a "large" price change.
a :Compute the values for the decomposition basket, B.b:Determine the numerical values of the substitution and income effects and graph yourresults.c:Is Good X normal or inferior goods for Mika? How do you know?
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∗ = __
Diogo has a utility function, 0.2, 0.8 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, p.. is $0.50, and income, Y, is $100, what is Diogo's optimal bundle? The optimal value of good q, is 9, = units. (Enter your response rounded to two decimal places.) Cha 15 tv MacBook Air 80 esc DD F1 F2 F3 F4 F5 F6 F7 F8 F9 ! @ 23 $ % & 3 4 7 8 Q W E R T Y tab A S F G J caps lock Z C V B mift fn control option command つエく6 ピ

Can you help me answer this macroeconomics theory question
10. Assume an individual's preferences are represented by the following indifference map and he has an income of S400. Which of the following is shown when the price of Good I is $20 and the price of Good 2 increases from $10 to S16? Note: Even though the price of Good 2 is increasing, the steps to determine the income and substitution effects are the same. 50 45 40 35 30 25 20 15 10 10 15 20 25 30 35 40 45 50 Good 1 Good 2 is a normal good. Good 2 is an inferior good, but not a Giffen good. Good 2 does not satisfy the Law of Demand. • Ignoring the Income Effect, the Substitution Effect will cause the individual to consume more of Good I. A. B. 21 C. 3 None of the above statements are true. D. Good 2
Please find the attached photo,
Please answer fast please arjent help please
Cobb-Douglas Preferences] Asad lives in a world with two goods (N=2), apples and bananas. He has a Cobb-Douglas utility function over these goods U(a, b) = a 0.7 b 0.3 . Asad has an income I = 200, and faces prices pa = 2, pb = 1 (a) We know that if Asad is optimizing (and consumes a bundle that contains both apples and bananas), that the slope of the budget constraint should be equal to his MRS. Use this and his budget constraint to solve for his optimal bundle. (b) Suppose the price of apples rises to 4, and the price of bananas rises to 3. What is his new optimal consumption bundle? (c) Suppose Asad instead had a utility function given by U(a, b) = a 1.4 b 0.6 + 1. Given the same prices and income as in part (b), what is his optimal bundle?

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