If the market for good X consists of two consumers whose individual own-price demand curves are given by X₁-9-3px and X₂=6-px +, where the latter demand curve is dependant on the former, what is the quantity demanded in this market when the market price is equal to 82? a. 6 b. 10 c. 4 d. 8 e. 2
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- The figure below shows a consumer maximizing utility at two different prices (the left panel) and the consumer's demand for good X at the same two prices of good X (the right panel). The price of good Yis $14. When the price of X increases from point M to point N along the demand curve, $. of income must be temporarily given to the consumer to isolate the substitution effect. 720 N 444 M 16.80 Demand for X 225 45 380 Quantity of X Quantity demanded of X Quantity of Y Price of X1. Let Amy derive utility each from housing, h, and a consumer good, z, with the following utility function: 1/ U=h¾/3₂¾3 M Her Mashallian demand equations are the following: h= and z=- 3ph 2M 3p₂ Amy lives in a city where everyone works downtown. While her income is $160 per month, her commute cost (bus pass) costs her $40 per month, so she only has $120 to spend on h and z. (we assume no time cost of the commute) The consumer good, z, has a price of $1 and the price of her housing, h, is $2 per unit. a. What is her quantity demanded of h and z and what level of utility is she currently enjoying? She is considering moving to a location further from work to a house where her commuting cost would be $60 per month (so she will have $100 to spend on z and h). The market adjusts ph and housing sizes across the city so that utility is the same at every location around the city. b. What is the equation for the appropriate demand function for housing in this city? C. What the price of housing…In two commodities world, utility function for a consumer and her income are given respectively. 11 U = x2y2 I= 480 If the price of these goods are Px= 15 and P, = 60 what would be her demand for these two goods * =? and y =? If the price of first good P has increased from 15 to 60. To keep her utility fixed how much does she need to spend for these two goods at least. In other words what should be her minimum income.
- Be fast Suppose there are three (3) consumers in a market for bottles of perfume; Mutumbu, Jasanu and Julius The individual demand for perfumes for each of these consumers is given as 10 bottles for Mutumbu, 15 bottles for Jasanu and 25 bottles for Julius at $60 per bottle for perfume. Thus, the market demand for perfumes if the market price is $60 is: (a)40 bottles (b)60 bottles (c)80 bottles (d) None of the above7 Asen tries to minimize his cost of using two goods x subscript 1 end subscript and x subscript 2 end subscript. The price of the first good is BGN 12 and the second good BGN 8. His utility function is x subscript 1 superscript 3 divided by 5 end superscript x subscript 2 superscript 2 divided by 5 end superscript and the utility he will get from using both goods, is 32 units. Find the Hicks quantities demanded and what Assen's minimum budget must be to consume these quantities and obtain the above utility. e-412, h2=21, h1=21 e=416, h2=21, h1=21 e=640, h1=32, h2=32 e=422, h2=21, h1=21 e=378, h2=21, h1=21 e-378, h2=20, h1=20 another answer e-378, h2=24, h1=24The table shows the total utility data for products S and T. Assume that the prices of S and T are $3 and $5, respectively, and that consumer Income is $22. Total Utility Units of S 1 12 2 27 3 ºd $43 3 43 Multiple Cheice P $4 Which of the following price-quantity schedules would represent the demand for S in the $3 and $4 price range (ə) (c) () P Ra $42 3 14 option C option E eption A (b) PARE 39 48 51 Od 3 5 Units of T 1 2 P 54 3 ROAD રત 2 3 Total Utility 20 35 45 50 52 CUIN
- For normal goodsA) the substitution effect of a price decrease will decrease the quantity of the good demanded while theincome effect of a price decrease will increase the quantity of the good demanded.B) the substitution and income effects of a price decrease will both increase the quantity of the gooddemanded.C) the substitution and income effects of a price decrease will both decrease the quantity of the gooddemanded.D) the substitution effect of a price decrease will increase the quantity of the good demanded while theincome effect of a price decrease will decrease the quantity of the good demanded.Assume a piece of jewelry and 2 consecutive drops in its price. Also consider Alia’s demand to be relative elastic in the price range from ?1 to ?2, and that she perceives jewelry as a Giffen good in the price range from ?2 to ?3. Draw her price-consumption curve with well-behaved preferences. Clearly label your graph.Consider the following utility functions: U(X.) X2+2r For the above utility function, derive the demand functions for X and Y as funetions of prices and a-) income. Explain whether these goods are nomal goods Explain whether two goods are complements or substitutes Sppose now that Price of good Y isS48 and income equals 1440, Using three distinct values of price of X (P 6.P -12.P-24) draw Price consumption curve and then using Price Consumption curve draw the b-) demand curve for X. Suppose Price of good Y is $48 and price of X is equal to 6. Using three distinet income values ( I 1440,7 = 2880.1 = 4320). draw Income Consumption curve and then using Income Consumption curve draw the Engel curve for good X. d-) Consider initially that Income (I) $1440, Pr 6 and Py 48. What is the initial optimal consumption levels of X and Y? Suppose that P, rises from S6 to $12. Find the substitution effect, income effect and total effect on good X. Explain the steps carefully and support your result…
- Show that the two utility functions given below generate identical demand functions for goods X and Y UCXY) log(X)+log(Y C) UCxY) (XY05 The demand function for good X and the demand function for good Y for both utility functions equal O A. X= and Y Pv Px О В. Х- and Y 2Pv Ос. X Y= 21 PXPY O D. Х- and Y 2P. 2Py ОЕ. X= Y= РХPY17) A ssume a consumer has $40 to spend and for both products the marginal utilities are shown in the following table: Quantity MU MU 1 35 80 2 20 40 3 12 18 Assume that each product sells for $10 per unit. a) How many units of each product will the consumer purchase? b) Assume the price of product B rises to $20 per unit. How will this consumer allocate her budget now? c) If the prices of both products rise to $20 per unit, what will be the budget allocation?Angela and Vanessa are two friend who always eat ice cream together. The regular price of ice cream is $1 per spoon. Angela always orders 3 spoons and Vanessa orders 5 spoons. Every Tuesday, the ice cream is 50% off. Angela orders 6 spoons and Vanessa order 7 spoons on Tuesday. Which of the following statement is incorrect? O The total quantity of ice cream demanded by Angela and Vanessa increased by 5 on every Tuesday. O Angela's individual demand curve has a downward sloping. O The promotion on every Tuesday shift out the demand curve. O Vanessa's individual demand curve isn't same as Angela's.