ii)Utility function: U = xy + 3x + y x = 15[Ans. x - 15. y - 72 == 7 3,2 = 1 ]Income constraint: I 212, Py = 12, Px = 8U = Q;Q2 »Pi = !, 2 = 41=120iii) Utility function:Constraint function:Qi + 4Q2 = 120[ Ans. O = 60, Q2 =15, 1 = 15]%3!

I have used Lagrangian technique. In mathematical optimization, the method of Lagrange multipliers…

ii) Utility function: U = xy + 3x +y x 15 [Ans. x - 15. y - 7,2 =1 15. y = 7 3,2 = 1 ] Income constraint: I 212, Py = 12, Px = 8 !! iii) Utility function: U = Q;Q2 , Pi = ! 2 =4 Pi =! Pz =4 1=120 Constraint function: Qi + 4Q2 = 120 [ Ans. O = 60, Q2 =15, 1 = 15] %3D

ii) Utility function: U = xy + 3x +y x 15 [Ans. x - 15. y - 7,2 =1 15. y = 7 3,2 = 1 ] Income constraint: I 212, Py = 12, Px = 8 !! iii) Utility function: U = Q;Q2 , Pi = ! 2 =4 Pi =! Pz =4 1=120 Constraint function: Qi + 4Q2 = 120 [ Ans. O = 60, Q2 =15, 1 = 15] %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 8/ A consumer has the following utility function: u (x, y) = 6xy + 10 a) Determine the marginal…

A: NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: O b) When he consumes zero amount of good 2, his MRS12 is equal to 1

Q: Law of equi marginal utility is an important law of cardinal utility analysis. Explain this law with…

A: Although utility is a subjective concept and varies from one person to another, the theory of…

Q: Explain how the price effect can be decomposed into the substitution and income effects of a price…

A: Economics as a subject is used to study and plan the allocation of scarce resources among humans…

Q: Suppose that upon solving for optimal bundles of hamburgers and french fries, we determine that when…

A: "Since you have asked multiple questions, we will solve the question asked by you. If you want any…

Q: yurt

A: The objective of the question is to understand the concept of utility functions, marginal rate of…

Q: Problem 2 Suppose that John's preferences over meat (M) and vegetables (V) are represented by the…

A: The utility function for John is given as follows. The value of * lies between 0 and 1. The income…

Q: The marginal rate of substitution between two goods always equals the O price of one good divided by…

A: Marginal rate of substitution between two goods always equals the Price of one good divided by price…

Q: Suppose Brian has to choose between purchasing plane tickets and water. Which of the following is…

A: The utility gets maximized at the bundle where the marginal utility per dollar spent is the same for…

Q: Suppose the price of Pizza is $10 the price of cola is $1, and the consumer's income is $60. In…

A: The budget line is a straight line that represents a different combination of two goods a consumer…

Q: How does a consumer maximizes their utility given that they experience a budget constraint? Explain…

A: A consumer always aims to maximize their utility or satisfaction from consumption of goods and…

Q: What is the value of Consumer A's marginal rate of substitution (MRS) of concert tickets for popcorn…

A: The utility is the total satisfaction that the consumer derives from the consumption of the…

Q: 3.4 Constrained Application: Recorded tracks and live music 0.4 0.6 U = ● - Utility function: Budget…

A: MRS, is the rate at which consumers are willing to substitute one good for the other. MRT is the…

Q: 2. Given the utility function U = x0.5y0.5 calculate the utility of consuming bundle z:[25,49].…

A: Marginal rate of substitution is equal to the ratio of marginal utility of good 1 with respect to…

Q: using two goods x subscript 1 end subscript and x subscript 2 end subscript. The price of the first…

A: The above utility function is a Cobb Douglas function of the form: U = Ax1ax2bwhere a+b =1 and A is…

Q: Alice only consumes bread (x₁) and butter (x2). Her preferences over these goods are represented by…

A: Economics uses the term "utility" to define a good or service's value or worth. Utility is, more…

Q: Suppose a consumer's satisfaction from consuming goods x and y is formulated by the equation U=X³Y².…

A: The term "Lagrange" refers to a method that may be used to determine the maximum and minimum values…

Q: The marginal rate of substitution between two goods always equals the O price of one good divided by…

A: ‘Utility’ refers to the satisfaction, which a consumer derives from consuming a good. Marginal…

Q: (20 points) A person has utility function U = X0.270.8 for goods X and Z at prices Px = $20 and Pz =…

A: Approach to solving the question: Detailed explanation: Examples: Key references:

Q: Which of the utility functions shown below would represent two goods that are substitutes? OA. U =…

A: Introduction Substitute goods are the goods which are exchanged for one another. Utility of these…

Q: 3- Assuming that the equation F(U, x, x , Xn) = ****** = f(x1, x2,,.....,xn): 0.33 a) Find the…

A: Utility, in the context of economics, refers to the subjective satisfaction or value that an…

Q: Question 3 Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags,…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Two consumers have utility functions given by UA = x¹/3y2/3 and UB = x¹/3 + y2/3 If each consumer…

A: A utility function is a representation for defining individual preferences for commodities or…

Q: 3) What problem could arise with consumers' net demand functions as any price becomes zero? What…

A: Suppose in an endowment economy price of one good hits zero. The problem could be that the consumer…

Q: Jonathan spends his income (M) on good X and Y. His preferences are represented by the utility…

A: In question 9 we have:- Jonathan spends his income (M) on good X and Y. The price of good Y is 1 and…

Q: For a utility function for two goods, U(x,y), to have a strictly diminishing MRS (1.e., to be…

A: We are given that for a utility function to have a strictly diminishing MRS, the following condition…

Q: a) Choose X, and X, to max the utility fxn, '(X,X)=chX,+Q-Q}hX, st: M - P, X, + P,X; a) Write down…

A: Sorry as per our guideline we are only allowed to solve only 3 sub parts at a time kindly repost the…

Q: 4. (Based on Renshaw (2016)) Consider the utility function u = f(x₁,x2) = 0.75 ln x₁ + 0.25 ln x2.…

A: Utility is a measure of satisfaction or happiness that an individual derives from consuming a…

Q: a) Choose X, and X, to max the utility fxn, U(X,X)=chX;+Q-a)h.X, st: M = P, X, + P,X; a) Consider a…

A: U( X1 , X2 ) = a ln X1 + (1-a) ln X2 M = P1X1 + P2X2 a.) Demand functions are derived by…

Q: You allocate $24 per week for the purchase of cookies and apples at your school's cafeteria. Your…

A: ANSWER STEP-1 Utility perform - U (C,A) = 2C1/2 + A1/2 Price of a cookie = $1 Price of Associate in…

Q: 3.2 Now consider the case of a consumer with Cobb-Douglas indirect utility function v(p, y) and…

A: The Slutsky Equation is used to understand how changes in the price of a good affect the quantity…

Q: draw the budget constraint for a person with income of $ 1000 if the price of pepsi is $5 and the…

A: A budget constraint is a term used in economics to describe all of the different combinations of…

Q: assume that both X and Y are goods s.) Consider a person whose preferences can be represented by the…

A: We first define the properties of each type of good in terms of price elasticity as well as income…

Q: Mr. MacGregor's preferences are such that he is indifferent between the following bundles of (x,y):…

A: Answer: Given, Bundles: (x,y): (1,4), (2,2), (4,1) U = ln(xy) Let us find the utility at each…

Q: Student question Time Left : 00:09:39 5) Quasimodo consumes earplugs and other things. His utility…

A: The utility function quantitatively depicts the value or satisfaction that a person derives from…

Q: Slutsky equation

A: The Slutsky equation is an essential idea in microeconomics that enables the analysis of the…

Q: On the following graph, plot Sean's demand for scented candles using the green points (triangle…

A: Demand refers to the quantity that a consumer wishes to buy at a given price in given period of time

Q: 7- Define the budget constraint and what does the slope of the budget constraint represent?

A: In Economics, budget is defined as a spending plan which is based upon the income and expenses of a…

Q: As Shown explain why, if you move away from the optimal point along the constraint line, the utility…

A: The IC curve shows the utility derived from consumption. The higher IC curve shows a higher utility.…

Q: Which of the following statements is correct? Suppose leisure is a normal good, then an increase in…

A: Normal Good: a normal good is a type of good for which demand increases as consumer income rises.

Q: b) Suppose that a consumer is choosing between Pears (A) and Oranges (B). Their utility function is…

A: Utility function : U = A1/2B1/2 Pa = 4 , Pb = 2 , Income = 120 Therefore , Budget Constraint :…

Q: Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these…

A: This can be described as the concept that provides the graphical representation of the combination…

Q: ) Explain by using an example why an MRS (Marginal Rate of Substitution) between two goods must…

A: The MRS is a measurement of how eager a customer is to trade one good for another in order to…

Q: B4) Suppose Kramer's utility for goods x, and x2 is represented by the following utility function:…

A: Here, Kramer's utility function is given in terms of x1 and x2 and one need to compute the Kramer's…

Q: m a) The demand for biscuits is given by x₁ The income the 5p₁ individual earns is K150. The price…

A: Given The demand equation for biscuits x1=m5p1 .... (1) The initial income is K150.…

Q: 3. Following table shows the willingness to pay of consumers to buy a pair of sport shoes and the…

A: Consumer surplus will be computed as a difference between consumer's willingness to pay for a…

Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

ii)
Utility function: U = xy + 3x + y x = 15
[Ans. x - 15. y - 72 =
= 7 3,2 = 1 ]
Income constraint: I 212, Py = 12, Px = 8
U = Q;Q2 »
Pi = !, 2 = 4
1=120
iii) Utility function:
Constraint function:
Qi + 4Q2 = 120
[ Ans. O = 60, Q2 =15, 1 = 15]
%3!

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 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Problem 2 Suppose that John's preferences over meat (M) and vegetables (V) are represented by the following utility function U(M,V) = a ln(M) + (1 − a) ln(V) where 0 < a < 1. ¹No claim of realism is made for the numbers in this example. 1 (a) Write down the Lagrangian for John's optimization problem. (Recall that John max- imizes utility given an income, I, and prices på and på for the goods.) (b) Solve for John's optimal consumption bundle (M*, V*) (as a function of income and prices) using the Lagrangian method. = (c) Suppose a = . Suppose also that John has income I = 1 and pv 2. What is the value of John's optimal happens if John's income doubles to I = 400? 200 and faces prices p consumption bundle? What =
Suppose we observe that an individual's demand for good 1 is: 1/(2p,+p2) (where I- income). From this we can conclude that: Goods 1 and 2 are perfect complements O The price of good 1 is higher than the price of good 2 Two answers are correct O Goods 1 and 2 are perfect substitutes Three answers are correct No answer is correct Goods 1 and 2 are normal goods O These goods may be perfect substitutes or perfect complements, it depends upon the utility function
1) Sharon spends her time (20h) between leisure (L) and work and he consume Y product from his working income (Py=1). Assume that she gets W$ per hour of working and has the following utility function: U (L, Y)=LY+2L a. b. C. Calculate the demand function for L and show it on a graph (L vs W). Calculate the labor supply (H) and show it on a graph (H vs W). What will happen to L, Y and H if the wage per hour (W) will decrease? =
A consumer’s preferences over two goods x and y are given bythe utility function U(x, y) = xαyβ with α, β > 0. The prices of the goods are px = 2 and py = 4.The consumer has an income of I > 0.(a) For what values of α and β are these utility functions strictly monotone?(b) For what values of α and β will the consumer demand (i.e., Walrasian demand) be more x than y?(c) For what values of α and β are these goods gross substitutes? For what values of α and β are these goods gross complements? Provide a justification for your answer.
Typed answer.
b) As in question 2a, A consumer has a utility function given by U = x°.25 y0.75 and has an income of £100, the price of good x is £5 and the price of good y is £10. Suppose the price of good y falls from £10 to £5. By how much does the demand for good y fall and how much of the resulting change in demand for good y is due to the substitution effect and how much is due to the income effect? Take a picture of your diagrams and upload with your answer
3. Consider the following utility function: X2 if: 1 2 u(x1, x2) X1 if: 1< x2 < 2 X2 + x1 otherwise Answer the following questions. (a) What is the Walrasian demand for this utility function?
Elements of Mathematical Economics
12) A consumer’s preferences are given by U(X,Y) = X0.6Y0.4. The price of X is 4, and the price of Y is 5. The consumer has an income of $2000.a) What is the utility maximizing choice of X and Y?b) How would the utility maximizing choice change if price of X falls to 3 because of a pricesubsidy?c) Given the answers to the previous parts plot a linear demand function for X.d) Show that the consumer would prefer the cash equivalent of the price subsidy in part b.
Principles of Economics 1 | S1 21/22 Time left 0:5) When the price of one good increases and the price of the other good and income are held constant, the budget line Select one: shifts parallel to the original budget line so that the new budget line is farther from the origin O b. shifts parallel to the original budget line so that the new budget line is closer to the origin rotates so that the intercept is farther from the origin on the axis representing the good that has experienced an increase in price O a. O c. O d. rotates so that the intercept is closer to the origin on the axis representing the good that has experienced an increase in price Next page
4. Tim wants to maximise his utility given his utility function of U(A, B) = A²B4. He faces the following prices and income: PA = 25; PB = 20; M = 250. However, a change in the price of good A to PA = 22 will change his optimal bundle. If he is only interested in being able to consume his original bundle of goods, how much income would he need after the price change? (a) Tim would require £54 less income (b) Tim would require £18.33 more income (c) Tim would require £10 less income (d) Tim would require £16.66 more income (e) Tim would require £16.66 less income
John has $300 as income and he uses his income only for apples and bananas. If he uses his income only for apples, he can buy 10 pounds. If he uses his income only for bananas, he can buy 15 pounds. Which one is the correct formula for his budget constraint when X=pounds of apples, Y=pounds of bananas and the prices are per pound? a) More information is needed to answer the question. b) 15X + 10Y = 300 c) 10X + 15Y = 300 d) 20X + 30Y = 300 e) 30X + 20Y = 300