If the price of food is $20, the price of clothing is $80, and annual income is $60,000, determine the number of units of food and clothing the consumer purchases and the amount of utility the consumer derives from the optimal combination.

If the price of food is $20, the price of clothing is $80, and annual income is $60,000, determine the number of units of food and clothing the consumer purchases and the amount of utility the consumer derives from the optimal combination.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 5WNG

See similar textbooks

Related questions

Q: If the government imposes a price ceiling of $70 in this market, then the producer surplus will…

A: Supply and Demand Curves:The supply curve (S) shows the relationship between the price of a good and…

Q: Suppose in a simple economy the following is produced. Note that all cheese produced is used in the…

A: The cheese will not be included in the calculation of the GDP because cheese is the intermediate…

Q: Please answer both of these sub-sections of questions

A: Step 1:16 Ans: Option D is correct OLS (Ordinary Least Squares) estimators are a…

Q: I need answer typing clear urjent no chatgpt used i will give upvotes

A: Approach to solving the question: please see the steps carefully as i have solved it clearly and…

Q: Select the concept that correspond to each description It is a plan of action undertaken by…

A: This image shows a set of descriptions with corresponding concepts that need to be selected from a…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Nominal Income: Nominal income is the income or earnings measured in current dollars or monetary…

Q: 6 Price Quantity Demanded 8 00 Quantity Supplied 18 8 16 10 14 5 12 12 4 14 10 3 16 8 2 18 6 1 20

A: Equilibrium Price and Quantity:The equilibrium rate and amount are the values wherein supply and…

Q: Please provide steps by step answer with proper explanation with final answer..... Don't use pepar…

A: Sure, let's simplify the explanation without using LaTeX or specific math notation:Netting…

Q: Given a demand curve of P = 189 - 2Qd and supply of P = 44 + 7Qs, find the total cost to society of…

A: P=189−32.22≈156.78To find the total cost to society of a lump sum tax of $18, given the demand and…

Q: After the elections of 2010, the U.S. Senate remained controlled by the Democrats, but the majority…

A: The fiscal policy implementation decision recognition information lag refers to the time it takes…

Q: 1.8 In hypothesis testing, the 'critical value' refers to... a. the threshold value defining the…

A: 1.8. In hypothesis testing, critical value is a point on the distribution of the test statistic…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: In the fictional market of Fileland, Nourine is the sole producer of paper binders. The demand for…

Q: Please provide steps by step answer with proper explanation with final answer.....

A: Step 1:The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Approach to solving the question: the explanation is also mentioned please see it carefully.…

Q: I need answer typing clear urjent no chatgpt used i will give upvotes

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Step 1:The study of the spatial distribution of economic activities and how they are influenced by…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: We are given the consumption function as follows: C(x) = 0.746x + 91.6, In the given case, we…

Q: Your company purchases a patent for $46,000 to attempt to compete in a usually restricted market.…

A: The straight line depreciation is calculated by dividing the initial cost of the asset by its useful…

Q: Please describe a shadow bank/define shadow banking and explain why thesefinancial institutions pose…

A: Financial intermediaries and activities that operate outside of the regular banking system and are…

Q: a. Before the tax is imposed, the equilibrium price is $ 3 and the equilibrium quantity is 10. This…

A: Using this…

Q: What is the term for the violation of the assumption that error variances are constant across…

A: In regression analysis, one of the key assumptions is that the error variances are constant across…

Q: Which of the following statements is TRUE? Real shocks tend to have a greater impact on poorer…

A: Option b: This option is correct because The correct answer to the question "Which of the following…

Q: Unbiasedness is a feature of the sample distribution of B1 if a. E ($1) = B₁E[(1/SSTx) Σ diui i=1 n…

A: To determine which equation reflects the unbiasedness of the sample distribution of β^1:An…

Q: 23 Which of the following represents an opportunity for generating a new product? Select…

A: Understanding the consumer presents a chance for the creation of a new product since it enables…

Q: 8. Consider a hypothetical economy with a nominal GDP of $1.2 trillion, real GDP of $600 billion,…

A: Lets solve each part of the problem step- by - step : Part (a) Calculate the money multiplier and…

Q: You consider buying a lot on which you will build a small apartment complex. The asking price for…

A: To determine whether to buy the lot and when to build the apartment complex, start by calculating…

Q: Ldocplcoeodlxmxs

A: In this extensive game with perfect information involving three decision-makers (A, B, and C) who…

Q: 2013 (Base Year) 2020 Product Quantity Price Quantity Price Meat 100 $10 120 $12 Potatoes 200 $30…

A: Steps to consider for finding real GDP growth rate Nominal GDP in year 2013Nominal GDP2013 =Current…

Q: None

A: 2015Burgers = 15 x 0.30 = 4.50Shoes = 6 x 10.00 = 60.00Scissors = 8 x 16.00 = 128.00 Total cost for…

Q: None

A: Brainstorming may be encouraged through creating an environment where there is no criticism. The…

Q: Please answer all 3 sub-sections of this question

A: Question 1.4The following statements discuss aspects of the coefficient of determination, R2, in…

Q: Don't use ai to answer I will report your answer Solve it Asap with explanation and calculation

A: a) Assuming a non strategic view of bargaining- While two distributors allow you to reach more final…

Q: 7. Use a diagram of the labour market to show the effects of the following on (i) wages paid to…

A: Step 1:Initial equilibrium: In each graph, D0 and S0 are initial labor demand and supply curves,…

Q: Kwowokdmckcm x

A: Step 1: Step 2: Step 3: Step 4:

Q: from the table above, answer the following questions. what is the value of equilibrium real…

A: 1. What is the value of the equilibrium real interest rate?The equilibrium real interest rate is…

Q: None

A: •A monopoly is a market structure where a single firm controls the entire market. In this scenario,…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Let's analyze the provided diagram and the questions step by step.Firm's Profit-Maximizing Price and…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: If player 2 chooses Left, player 1 chooses down Why? Because $6 > $4, and, if player 2 chooses…

Q: Figure 25-1. On the horizontal axis, K/L represents capital (K) per worker (L). On the vertical…

A: Option a: This option is correct because if both the quantity of physical capital (K) and the number…

Q: Gains from trade may be realized if opportunity costs between two countries are Different Or…

A: The gains from specialization and trade depend on the existence of:Comparative advantage.The gains…

Q: None

A: Question 3On March 3, 2020, the Federal Reserve (Fed) cut interest rates by half a percentage point…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: To determine the correct option, we need to understand two key concepts: Conversion Cost and…

Q: Give step by step answer with final answer

A: The reward matrix must be analyzed in order to identify the prevailing strategies and Nash…

Q: Q2. Suppose an economy is represented by the following equations. Z=C+I+G C = 300 + 0.5 YD T= 400 I…

A: In the graph:The initial aggregate demand line is Z=1300+0.5Y intersecting the 45° line at…

Q: Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the…

A: To determine which of the given options would cause the equilibrium to change from point C to point…

Q: Gorgonzola is a small island nation with a simple economy that produces only six goods: sugar cane,…

A: First, let's summarize the quantities and prices given:ProductQuantity (2013)Price (2013)Quantity…

Q: do fast.

A: The price elasticity of demand measures the responsiveness of the quantity demanded of a good to a…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Given the production function,P(L,K)=28L0.3K0.7 We are going to solve for the following,Marginal…

Q: What is the profit maximizing quantity for this firm?

A: In economics, the profit maximizing quantity is the level of output at which a business can make the…

Q: Explain the concept of the loanable funds market and how it determines the real interest rate.…

A: The Loanable Funds MarketThe loanable funds market is a theoretical model used by economists to…

Question

If the price of food is $20, the price of clothing is $80, and annual income is $60,000, determine the number of units of food and clothing the consumer purchases and the amount of utility the consumer derives from the optimal combination.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

what is A curve showing combinations of two goods that provide a consumer with a constant amount of utility ?
How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?
Aria consumes only two goods, food and clothing. The marginal utility of the last dollar she spends on food is 12, and the marginal utility of the last dollar she spends on clothing is 9. The price of food is $1.20/unit, and the price of clothing is $0.90/unit. Is Aria maximizing her utility?
Define Economic utility
Suppose John decides to buy 4 units of food and 4 units of clothing with his $12 budget. Would his marginal utility per dollar spent on food be greater than or less than his marginal utility per dollar spent on clothing? What does this tell you about how he should substitute food for clothing if he wanted to increase his utility without spending any more money?
A consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $30, and T-shirts cost $10. At the current rate of consumption, the marginal utility of jeans is 60, and the marginal utility of T-shirts is 30. Is this consumer maximizing his or her utility? Would you suggest that he buy more jeans and fewer T-shirts, or more T-shirts and fewer jeans?
What is meant by Utility ?
If marginal utility is less than the price, the consumer will
If at a quantity consumed of 1 unit, total utility equals 25 and marginal utility equals 25, and at a quantity consumed of 2 units, total utility is unknown and marginal utility is 20, and at a quantity consumed of 3 units, total utility is 57 and marginal utility is unknown, what is marginal utility of the third unit?
Q1. You have Rs.10. The price of samosa is Rs.1 per unit. The price of a steak sandwich is Rs.3 The utility received from consuming samosa and steak is given below. a. How many samosas and steak sandwiches should be bought to maximize utility? Calculate utility maximizing quantities of samosas and steak sandwiches when income equals Rs.10 and the price of beer is Rs.1 and the price of steak sandwiches is Rs.3 using the utility b. maximizing rule No. of TU of samosa MU of No. of steaks TU of steaks MU of steaks samosas samosa 1 15 1 24 2 24 45 32 63 4 39 4 75 45 84 47 87
Would you expect total utility to rise or fall with additional consumption of a good? Why?