John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks in their indifference curves. At the initial endowment point, the ratio of John's marginal utility of x to his marginal utility of y is J and the ratio of Belle's marginal utility of x to her marginal utility of y is B, where I < B. The competitive equilibrium price ratio is p/py = C. Which of the following is true? a. C> B. b. C < J. c. C = J. d. C = B. e. J

Q: Assume you are spending your full budget and purchasing such amounts of X and Y that the marginal…

A: Marginal utility is additional utility derived from one extra unit of good consumed.

Q: Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2. Assume also that…

A: The demand elasticity of a good is given as -1 and the supply elasticity of the good is given as +2.…

Q: Consider a hypothetical consumer named Hayden who is shopping for bread and brie. The graph with…

A: The graph shows two points and associated values for bread and brie combinations correspond to…

Q: 1. Morris Zapp and Philip Swallow consume coffee (c) and tea (t). Morris has an initial endowment of…

A: EXPLANATION

Q: Consider an economy with two agents and two commodities. Consumers' preferences are represented by…

A: Given  Agent 1's utility function: u1x11,x21=x111/2x211/2          ......(1) Agent 2's utility…

Q: His utility

A: A utility function is a concept used in economics to represent the preferences of an individual or a…

Q: An economy described in an edgeworth box consists of 2 goods, namely X and Y and two consumers,…

A: Given, a two good and two-person economy: Utility functions: A: UA = XAYA B: UB = XBYB Endowments:…

Q: Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is…

A: MUx (for Jim) = y MUy (for Jim) = xPx = $2     and  Py = $4   ( as given in another subpart of…

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: 1. Tom (T) and Jerry (J) have identical incomes I. Their preferences can be described by the utility…

A: Utility refers to the satisfaction or happiness that a consumer get from the consumption of goods or…

Q: Question 3. Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A's utility…

A: Utility function

Q: Suppose that U(f,c) = f + 8c^(1/2) is a utility function that describes Amelia’s preferences over…

A: Since you have posted multiple questions, we will answer the first two questions for you. if you…

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.