How would a utility-maximizing household respond to a decrease in lump- sum taxes (T) if both consumption (C) and leisure (I) are normal? Both I and C rise. O I rises and C falls. Both I and C fall. I falls and C rises.

Q: To remain in consumer​ optimum, a price decrease requires(blank) in consumption. A price increase…

A: 1. As per law of demand, decrease in price will result in increase in demand.   A price decrease…

Q: Tom's income is 32. He consumes a single consumption good, C, which has a price of 2. His utility…

A: In the question above, it is given :  Tom's income is 32.  Tom consumes one single good, C.  C's…

Q: Jason spends his entire budget on coffee and doughnuts. You have the following data on his choices:…

A: Answer: Introduction: A consumer maximizes his utility where the indifference curve is tangent to…

Q: Zander has a weekly allowance of $24, all of which he spends on pizza and movie rentals, whose…

A: The maximum utility value shows the maximum satisfaction received by the consumer from the…

Q: What happens to the original budget line if the income of the consumer falls by 25%? (i.e., Will…

A: The budget line shows the different combinations of two goods that a consumer can consume given the…

Q: What is the budget line for consumption (C) and leisure (L) if a person faces a constant wage of $12…

A: There are 110 hours in the week that can be distributed either to work or to leisure 110=H+L...(1)…

Q: Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her…

A: P1=Rs 6 P2=Rs 8 Q1=6 Q2=8

Q: The diagram depicts Julia's choice of consumptions in periods 1 and 2. She has no income in period 1…

A: As can be seen that for any consumption level in period 2 lower interest rate led to more…

Q: If a consumer starts at point A, and then receives an income in current income, this would appear as…

A: Budget constraint refers to a a graphical representation of all possible combination of two goods…

Q: Given the utility function: U = ln c + l + ln c’ + l’ and the budget constraint:…

A: given utility function: U = ln c + l + ln c’ + l’ budget constraint:…

Q: 3. U(X,Y)= X1/2Y1/2 M = $36; Py = $1; Px is initially = $1; the price of Good X increases to Px =…

A: ** As per the guidelines we can only solve the 3 sub-parts of the first question** Compensating…

Q: 5. Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L -…

A: In economics, utility refers to the satisfaction or happiness obtained from the consumption of goods…

Q: Adrienne consumes three goods, x,y, and z. Her consumption preference is given by the utility…

A: U(x,y,z) = x17y27z47Px = 1Py = 10Pz = 10

Q: Effect of an increase in income leads to: an increase in the consumer's utility. The statement is…

A: Income effect is the change in demand for a good or service caused by a change in a consumer's…

Q: An equation that represents a utility-maximizing pattern of consumption of two goods, A and B, is…

A: Utility Maximising Condition of consumption of two goods A and B: Slope of Indifference Curve =…

Q: u (x₁, x2) = min { } If the price of good 1 is $5/unit, the price of good 2 is $2/unit, and income…

A: "The utility function in the form of 'min' represents the perfect complement case. Two goods when…

Q: An individual has utility function U(X, Y) = min{4X2, Y2). Find the expenditure function as a…

A: Note: Since you've asked multiple questions, we will solve the first question for you. If you want…

Q: If a consumer has spent all her income on two goods, a and b, and we fins that (MUA) / (MUB) =…

A: A consumer's increased enjoyment from having one more unit of an item or service is referred to as…

Q: At point C, how many units of Good Y are bought? Round to 1 decimal place.

A: The budget line, also known as the budget constraint, depicts all of the conceivable combinations of…

Q: Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L - 40).…

A: Optimal consumption is when MUL / MUC = w Where, MUL = Marginal utility of leisure  MUC = Marginal…

Q: 4. Gob has a utility function over consumption (C) and leisure (L). U=C(L-8). His budget constrain…

A: Given: Utility function: U =C (L - 8) Budget constraint: 200 ( 50 - L ) + 1600 - C = 0

Q: A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to…

A: Budget constraint: given the price of 2 goods and consumer’s income. The budget constraint shows…

Q: wasi's utility function is U(x₁, x₂)=5(In x₁)+x₂. Given her current income and the current relative…

A: The utility function shows the relationship between utility and commodities that are consumed. The…

Q: 2. Given the utility function U(x; y)=x²y³, and P-3 while P-2, with budget m=100. Measure the MRS,…

A: A utility function is a concept in economics that quantifies an individual's preferences or…

Q: Compute for the optimum combination making use of the 6 steps and fill out the blanks with the…

A: Equi marginal principle belongs to the micro economics analysis. It says that marginal value derived…

Q: QUESTION 1 For the utility function U = Qx0.50Qy(1-0.50) and the budget 122 = 8Qx + 14Qy find the…

A: The utility function is given as The budget is given as The price of X is increased by a factor of…

Q: Assume the consumer is correctly applying the rational spending rule (consumer equilibrium) for…

A: Here, it is given that a consumer is in equal it implies that marginal utility per dollar spent on…

Q: Following exercise is requested: (a) Draw a budget line knowing that: nominal income is $100/week,…

A: A budget line provides different combinations of purchasing instances that a consumer can choose to…

Q: A basket of goods for a given consumer includes two goods, X and Z. Consumer income is equal to…

A: Here, given information is: Income: $1,500 Price of X: $20 Price of Z: $25 Quantity of X: 10

Q: » Pauline spends her income in two goods: good r and good y. Her utility function is given by u(x,…

A: The utility of a combination of two goods will be maximized at the point where the budget constraint…

Q: Would you expect total utility to rise or fall with additional consumption of a good? Why?

A: Marginal utility is the additional satisfaction that is obtained from consuming one more unit of the…

Q: Please draw the income-consumption (or income-offer) curve for each of the following utility…

A: The income-consumption or income-offer curve is a locus of optimal consumption bundles when money…