Jake's preferences for goods X and Y are represented this utility function: U = X3Y27.Each unit of X costs $9.Each unit of Y costs $1.Jake has a budget of $450a) Find Jake's optimal bundle.b) Assume the government subsidizes the first 10 units bought of good X. For the first 10units of good X, the government gives Jake a rebate of $2. Find Jake's new optimalbundle.

Given utility function :- U = X3Y27 PX = $9, PY = $1, B = $450 Jake's problem can be written as -…

Answered: Jake's preferences for goods X and Y…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 25SQ

See similar textbooks

Similar questions

a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese meals and use the utility maximization conditions to find the demand for Vietnamese food of the typical consumer (keep in mind that since utility is quasi-linear, you can find demand without information about the consumer’s weekly budget). b) Sum across consumers to find the weekly market demand for Vietnamese meals in NYC.
David's utility function for good X and Y is given by U (X,Y) =X2y3. Where px,py and I are the price of good X, price of good Y and consumer income respectively. A. Write the budget constraint of the consumer and derive the demand function for good X and Y b: What combination of X and Y maximizes the consumer at I=100,px=4,and py=5 c. Calculate the marginal rate of substitution between X and Y at equilibrium and interpret your results.
David’s utility function for good X and Y is given by ( x,y )= x²y³. Where Px, Py and I are the price of good X, price of good Y and consumer income respectively. a. Write the budget Constraint of the consumer. b. Drive the demand functions for good X and Y c. What combination of X and Y maximizes the consumer’s at I=100, Px= 4, Py=5 d. Calculate the marginal rate of substitution between X and Y at equilibrium and interpret your results.
Help!
Question 1 Consider a consumer with utility x₁2/3x21/3 and a budget constraint of 3x₁+6x2 ≤100. What is the maximum utility the consumer can achieve
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?
The table shows the marginal-utility schedules for goods A and B for a hypothetical consumer. The price of good A is $1, and the price of good B is $1. The income of the consumer is $11. Good A Good B Quantity MUA Quantity MUB 1 10 1 16 2 9 2 14 3 8 3 12 4 7 4 10 5 6 5 8 6 5 6 6 7 4 7 4 If the consumer spends the given budget and gets maximum utility out of it, then she is receiving how much satisfaction from each dollar spent on the final unit of good A consumed? Multiple Choice 11 utils per dollar 6 utils per dollar 106 utils per dollar 12 utils per dollar
C.16.
Bob has utility function U(x,y)=x2+y over goods x and y a) Do we have a name for this type of utility function? Are Bob's preferences well-behaved? b) Let Bob have budget I=$60, and let prices be Px=$30, Py=$10. Find Bob's optimal basket of goods x and y. Is this an interior or corner solution? c) What will happen if the price of good y doubles? [Think about: can we use this utility function to describe preferences over pet snakes and pet mice?]
A consumer’s weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer’s utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis. 1A. Suppose that this consumer’s income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones? 2 Determine and explain the Profit Maximization output of a perfectly competitive firm
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.
Enrique is a movie buff. He likes to watch on demand movies from his cable company, which cost $5 each, and so likes to go to the local movie house, which charges $15 a ticket. Suppose that given his budget and his tentative spending plans, the marginal utility from a cable movie is 15 utils and the marginal utility of a movie at the local cinema is 45 utils. Assuming he is spending his entire budget, Enrique is currently maximizing his utility Enrique can increase his utility by buying more cable movies and watching fewer cinema movies Enrique can increase his utility by buying more cinema movies and fewer cable movies

SEE MORE QUESTIONS

Recommended textbooks for you

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics A Contemporary Intro

Economics

ISBN:

9781285635101

Author:

MCEACHERN

Publisher:

Cengage

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

SEE MORE TEXTBOOKS