In the utility function above, x and y are substitutes. The Consumer Maximization Problem is as follows:Max(x;y)=5x + 6y subject to x + 2y = 10, We know MRSxy=5/6, find it by setting U(x, y) = U¯ and solving the utility function for y and what is the price ratio?

In the utility function above, x and y are substitutes. The Consumer Maximization Problem is as follows:Max(x;y)=5x + 6y subject to x + 2y = 10, We know MRSxy=5/6, find it by setting U(x, y) = U¯ and solving the utility function for y and what is the price ratio?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

See similar textbooks

Related questions

Q: Sam's is interested in two goods, X and Y. His indirect utility function is (same as U* = M/(px0.8…

A: Compensating variation represents the amount of income that must be given to the consumer to permit…

Q: From economic theory, the willingness of a consumer to give up consumption of one commodity (X) in…

A: Consumer equilibrium refer to that situation of quantity consume where consumer receives maximum…

Q: Goods 1 and 2 are perfect complements, and a consumer always consumes them in the ratio of 2 units…

A: Perfect complements are a pair of goods or services that are typically consumed together in fixed…

Q: Suppose the consumer has an income of $100. Her utility function is given as U(x1, x2) = X1 + 2x2.…

A: When the two goods are perfect substitutes, the consumer will spend all of its income on that good…

Q: Suppose that there are two goods, X and Y. The utility function is U = XY + 2Y. The price of X is…

A: Given information: U = XY + 2Y ---------> Utility function --------------------------- The price…

Q: Suppose that Mary maximizes utility with bundle A, which contains 20 units of good X and 10 units of…

A: X = 20 units Y = 10 units U(x,y)= X12Y14Income = 90

Q: If Philip's utility function is U=4 (41)05+42 what are his demand functions for the two goods? Let…

Q: A consumer’s preferences over two goods x and y are given by the utility function U(x, y) = min{αx,…

A: Consumption: It refers to the intake of goods and services in the economy. The more the consumption…

Q: Mary spends all her budget on statistical software (S) and office supplies(O). Her preferences can…

Q: Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M,…

A: The consumer is in equilibrium when indifference curve is tangent to the budget line. It is…

Q: How can I analyze and find the Marshallian Demands of the following Utility function?…

A: The perfect complements x1 and x2 would result in the perfect complements which would be consumed…

Q: QUESTION 3 Consider an individual who has a utility function U(X,Y) = 2x1/2)+ y(/2), the prices of…

Q: Given the following: zA = 16 − 3x zB = 14 − 2y, where z is the marginal utility per…

A: The Indifference curve represents the various combinations of two commodities that will yield the…

Q: Karl has utility function U(X,Y)= XY. He faces the following prices and income: Px = 10; Py = 20; M…

A: The optimal bundle refers to the combination of goods or services that maximizes an individual's…

Q: a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese…

A: Total customers = 120,000 Price of other products = Pm= $1 Price of Vietnamese Meals = Pv The…

Q: Jamini has $800 of income to spend on goods X and Y. The prices of goods X and Y are $200 and $10,…

A: Wants satisfying power of commodity called utility , and when anyone get their utility equals to…

Q: Consider the following utility function: U = 4X + Y. A consumer faces prices of P, = $2 and Py =1.…

A: Answer: A consumer maximizes his/her utility where the following condition satisfies:…

Q: Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility function is as…

A: Utility indicates the satisfaction earned by consumers from the consumption of some goods.

Q: Jennifer buys both turkey (x) and cheese (y) for her sandwiches. Her preferences over these two…

A: Utility Function: U(x, y) = min [x, 2.5 y] Lets assume , Price of good x is p1 Price of good y is p2…

Q: sider the utility function U(x, y) = xy, which describes the enjoyment Emi gets from consuming s (x)…

A: Equilibrium condition: MRSxy = Px/Py

Q: Suppose a consumer’s preferences for goods Y and X can be represented by the utility function,…

A: A rational consumer will consume where the MUx/MUy = Px/Py Here , MUx is the Marginal utility of…

Q: Suppose david faces a new utility such as U(X, Y)=25x0.2 Y0.75 for consuming commodity X and Y, redo…

A: Since nothing is specified, we will answer only the first question E. Please resubmit the question…

Q: Sam's is interested in two goods, X and Y. His indirect utility function is U* = M px-0.8 py0.8-1.…

A: Consumer surplus is the benefit that a consumer receives if he pays a price that is less than the…

Q: eferences can be represented by the utility function 1 u(x, y) : x +2/y. = - 2 me Zack has income m…

A: The equilibrium is set up where the slope of indifference curve is equal to the slope of budget…

Q: (a) What type of preferences does Alfred have and are they homothetic and/or quasilinear? (b) What…

A: Alfred's utility function is given by U(X,Y) = 5X + 6Y, where X represents the quantity of good X…

Q: To maximize total utility, consumers will always choose the marginal unit of the good that yields…

A: Utility maximisation implied the concept that individuals and firms seek to get the highest…

Q: You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the…

A: UNIT OF X MUx UNITS OF Y MUy 1 10 1 8 2 8 2 7 3 6 3 6 4 4 4 5 5 3 5 4 6 2 6 3 Given…

Q: The utility function is given by u(x₁, x2) = 2x a) For this utility derive the demand func b) Set…

A: We are given the utility function as: U(x1,x2) = 2x1 + x2

Q: A utility function is given as U = √MB where B represents the quantity of books consumed and M…

A: A utility function measures how satisfied or happy an individual is when consuming goods and…

Q: A) Suppose a quasilinear utility function is given by u(x₁, x₂) = 2√x₁ + 4x₂. 1. For this utility…

A: Utility function shows relationship between utility and inputs. The Engel curve exhibits…

Q: This question will let you examine/explore a more interesting utility function than the simple…

A: Marshallian demand focuses on the demand of individual consumers or households for a particular good…

Q: Suppose consumers A and B have the following demand functions for x: For each consumer, is x is…

A: The nature of goods as normal and inferior goods can only be recognised in the presence of income…

Q: sider two goods that are perfect substitutes such that four (4) units of good X always provide the…

A: Substitute goods refer to the goods which are used for each other. Both are competitors , when price…

Q: For the utility function U = Qx0.15Qy(1-0.15) find the trade-off rate between good X and good Y at…

A: The given utility function: The trade-off between good X and good Y is represented by the marginal…

Q: Suppose Jasmine's utility function is U(x,y) = 15x -5.3x² + y. Her income is 5.8 dollars, the price…

A: Utility maximization refers to the process of determining the combination of goods and services that…

Q: Suppose your utility for goods x1 and x2 is represented by the following utility function:…

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

Q: When John maximizes his utility, his consumption bundle is (2 burgers, 3 burritos) and his marginal…

Q: 3. A consumer is faced with a utility function u(x, y) = 4x² + 3xy + y² And his budget constraint is…

A: Thank You for the question. According to Bartleby's answering guidelines, we answer only the first 3…

Q: Consider your preferences for Gasoline (X) and a composite good (Y). Your utility function is U(X,Y)…

A: The utility is maximized where the budget line tangents the indifference curve.

Q: pose two goods, X and Y, are perfect complements and U = MIN (X, Y). A consumer has $24 to spend.…

A: The perfect complements refer to goods that are used jointly in a fixed proportion to satisfy the…

Q: he utility function is given by u(x₁, x2) = min{2x₁,5x2}. a) For this utility derive the demand…

A: Utility function shows the relationship between utility and consumptions of goods. This is case of…

Q: What is the demand for goods L and Y given the utility function U(L,Y) = L+2Y where the price of L…

A: Substitute goods refers to the goods which are used for each other. The rise in the price of one…

Q: For each of the following utility functions answer the following questions (i-iv): i) Calculate the…

Question

Answer correctly with proper explanation

Video Video

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

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

Consider two goods that are perfect substitutes such that four (4) units of good X always provide the same amount of satisfaction as three (3) units of good Y. The consumer’s income is $100, the price of good X is $10, and the price of good Y is $8.Given the preferences of this consumer, we can write her utility function as U = 3X + 4Y. a. Calculate the optimal quantity of good X for this consumer. b. Calculate the optimal quantity of good Y for this consumer. c. Sketch the consumer’s budget line and indifference curve that passes through the optimal consumption bundle. d. Choose another bundle that exhausts the consumer’s income and show that she prefers the optimal bundle in parts a and b to the bundle you have chosen here.
Suppose the weighted marginal utility for two goods x and y at a position of consumer equilibrium 70. If the price of good x is r10 and the relevant marginal utility for y is 140 what is the price of good y and the relevant marginal utility for x
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 Y is $4.50. When the price of X increases from point S to point R along the demand curve, the substitution effect of the price increase is _____. −8 −7.5 −6 −9 −10
For each of the following utility functions answer the following questions (i-iv): i) Calculate the marginal utilities MUx and MUy ii) Calculate MRSx,y and determine if this is diminishing as good x increases iii) if I=80, Px= 4, Py=2, determine the utility maximizing basket. iv) Determine the demand curves for good x and y (a). u(x,y)= 6x^2/3 +2y (b) u(x,y)= 3x+7y
To maximize total utility, consumers will always choose the marginal unit of the good that yields the most marginal utility per price. True False
Biwei’s utility function U=4XY, where X is consumption of beer and Y is consumption of pizza. For this utility function, the marginal utility of X is MUx = 4Y; the marginal utility of Y is MUY = 4X. 1) Suppose Y = 3. Calculate Biwei’s utility for X = 2, 3, 10, and 11. For a given level of Y, does good X display diminishing marginal utility? 2) Suppose X = 3. Calculate Biwei’s utility for Y = 2, 3, 10, and 11. For a given level of X, does good Y display diminishing marginal utility?
Consider your preferences for Gasoline (X) and a composite good (Y). Your utility function is U(X,Y) = X^(2/5 )+ Y^(2/5). You have an annual income of $40,000. Suppose the price of the composite good is $1. a) Due to shortages, the government has introduced a rationing system such that you can only consume a maximum of 5,000 liters a year at $1 a liter. What would be your optimal consumption bundle? b) The government removes the rationing system and the free market price of gasoline jumps to $2. What would be your new optimal consumption bundle? Are you better off with or without the rationing? Show by finding the utility levels. c) Illustrate your solution in a clearly labeled graph.
Harry spends his weekly income M > 0 on two commodities, food (X) and rental videos (Y). His utility function is U (X,Y)=2-√x+2·√Y The price of food is Px > 0 and the price of rental videos is Py > 0. Is any of the two goods, food or rental videos, an inferior good for Harry? (
Let a1 and x2 denote the quantities consumed. The consumer's preferences are represented by the utility function: U (r1, 22) = V+ VT2. Suppose the consumer has income m =100 and that the prices for the two goods are pi -2 and p2=8. Calculate the optimal quantity demanded for good 1.
Joyce drinks both coffee (x) and tea (y). Her preferences over these two goods can be represented by the utility function U(x,y) =x + 3y^1/2 where x represents the number of pounds of coffee and y represents the number of cups of tea. a) Given her preferences, find her demand functions for coffee (x) and tea (y). b) Suppose that the price of a pound of coffee is $4 and that she has $56 to spend on coffee and tea. Write her demand curve for tea. Illustrate her demand curve. c) Suppose that the price of a cup of tea is $1 (the price of coffee and income remain $4 and $56, resp.). Use your demand functions to find her best bundle. In an indifference curve diagram illustrate her best bundle at these prices. For the remainder of the question, assume that her income rises to $60 and that the prices of coffee and tea are unchanged at = $4 and =1.
Suppose that the price of good X is $6 and the price of good Y is $2. You have $144 to spend and your preferences over X and Y are defined as: U(x,y) = x2/3y1/3 Calculate the marginal utility of X Calculate the Marginal Utility of Y What is the optimal Choice of X and Y given the PX = $6, PY = $2 and I = $144 If Income is increased to $150 calculate how the optimal choice of X and Y change
your answer. 2. The utility function of a consumer over two goods x and y is given by u(x,y) = 20 ln x + 2y The price of y is 1. Let p denote the price of x. The consumer has an income of M> 10. The consumer's price elasticity of demand for x has a lower absolute value compared to the income elasticity of demand for y. Is this true or false? Explain by calculating both elasticities.