Madeline lives in Melbourne, where she buys kiwis at $10 per box and bananas at $9 per a bunch. With her income of $182 she buys 11 boxes of kiwis and 8 bunches of bananas. Hugo, who lives in Sydney, with an income of $175, consumes kiwis at a cost of $7 per box and bananas at a cost of $12 per bunch. Assuming their preferences are identical, then (select one) a) Madeline would prefer Hugo's consumption bundle to her own. b) Hugo would prefer Madeline's consumption bundle to his own. c) They would both be indifferent between their own bundles and the other's. d) Each prefers his/her own bundle to that of the other. e) We can't make any of the above statements without more information.

Madeline lives in Melbourne, where she buys kiwis at $10 per box and bananas at $9 per a bunch. With her income of $182 she buys 11 boxes of kiwis and 8 bunches of bananas. Hugo, who lives in Sydney, with an income of $175, consumes kiwis at a cost of $7 per box and bananas at a cost of $12 per bunch. Assuming their preferences are identical, then (select one) a) Madeline would prefer Hugo's consumption bundle to her own. b) Hugo would prefer Madeline's consumption bundle to his own. c) They would both be indifferent between their own bundles and the other's. d) Each prefers his/her own bundle to that of the other. e) We can't make any of the above statements without more information.

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: Sukai consumes only apples and tomatoes. Her utility function is U(x, y) = X2 y where x is the…

A: GIVEN Ans. Utility Function, U(x, y) = x^2 y^8 Income ( M) = $320 the price of apples( Px) = $4…

Q: Tim and Alyssa Espinosa live in Dallas and enjoy going out to fancy restaurants for dinner and to…

A: The purpose of this question is to show the indifference curve depicts the combination of two goods…

Q: Suppose consumer consume two goods. Can both goods be inferior? Can one of the goods be inferior?…

Q: Suppose Cawlin has a budget of $90 that he spends on movies Q) and roller skating (Qal. The price of…

A: a budget constraint represents all the combinations of goods and services that a consumer may…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Given Information: The budget of Person A is £21 to spend on toothbrushes and toothpaste. The price…

Q: Abigail, Bernard, Cornwallis, and Douglas each derive a distinct amount of utility from consuming…

A: Utility theory is a positive theory. that looks to make sense of the people's noticed way of…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Income and consumption curve shows the relationship between the level of income and consumption of…

Q: Suppose Joe's utility for lobster (L) and soda (S) can be represented as U = L0.5 S0.5. Joe…

A: ***Since the student has posted multiple questions, the expert is required to solve only the first…

Q: Suppose there are three (3) consumers in a market for bottles of perfume; Mutumbu, Jasanu and Julius…

A: Market demand refers to the total quantity of a good or service that consumers in a specific market…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

Q: budget constraint

A: A budget constraint represents the diverse combinations of products and offerings that a consumer…

Q: Problem 1. Ted is an eight-year-old boy who loves Pokémon cards and Lego minifigures. His father…

A: Since you have posted multiple questions, we will provide the solution only to the first three…

Q: Carol needs to decide how to spend her wealth on fish and chicken. For Carol, 1 lb of fish is…

A: Given, u(x; y) = 2x + y

Q: Assume that a consumer has a given budget or income of $12 and that she can buy only two goods,…

A: Opportunity cost is the cost of the next best alternate foregone when the current option is chosen.

Q: 7.2 In Problem 7.3, Pierre's friend Henri lives in a town where he has to pay 3 francs per glass of…

A: Consumption alludes to the utilization, utilization, or expenditure of goods and services by people,…

Q: Why in this question is consumer surplus equal to the utility gained from consumption?

A: The consumer surplus concept is derived from and based on the diminishing marginal utility law.…

Q: A consumer has Cobb-Douglas preferences for beer and pizza. She spends 50% of her budget on New…

Q: Sam likes Pepsi (P) twice as much as he likes Coke (C). Assume the price of Pepsi is $3 and the…

A: Budget constraint shows different combinations of two goods that a consumer can afford with the…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…

Q: Suppose your only source of income is work and that you are paid $20 per hour. This determines a…

A: Higher salaries have a substitution impact, which indicates that workers will forego leisure time in…

Q: Antonio likes to have coffee (C) and donuts (D) for breakfast every morning. He likes to dip his…

A: For every cup of coffee, Antonio eats 1.5 donuts. This preference represents that coffee and donuts…

Q: Suppose your classmate Hilary loves to eat dessert-so much so that she allocates her entire weekly…

A: The consumer will maximize utility at a point where marginal rate of substitution is equal to the…

Q: By how much will the slope of Matt's budget constraint change if his income were to increase from…

A: In economics, a budget constraint represents all the combinations of goods and services that a…

Q: 5. Jonas purchases only two goods, starfruit (S) and kiwi (K). He has an income of $60 and can buy…

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

Q: a) In a graph, draw total utility as a function of number of toothpaste tubes, assuming that Andrea…

A: "Since you have asked multiple parts, we will answer only first part for you. If you have any other…

Q: You enjoy consuming apples (A) and oranges (O). Suppose that your by Your marginal utility function…

A: The consumer will reach at equilibrium when the slope of a budget line is equal to the slope of an…

Q: Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of…

A: In consumer demand theory, utility maximization requires the ratio of marginal utilities of two…

Question

Madeline lives in Melbourne, where she buys kiwis at $10 per box and bananas at $9 per a bunch.
With her income of $182 she buys 11 boxes of kiwis and 8 bunches of bananas. Hugo, who lives
in Sydney, with an income of $175, consumes kiwis at a cost of $7 per box and bananas at a cost
of $12 per bunch. Assuming their preferences are identical, then (select one)
a) Madeline would prefer Hugo's consumption bundle to her own.
b) Hugo would prefer Madeline's consumption bundle to his own.
c) They would both be indifferent between their own bundles and the other's.
d) Each prefers his/her own bundle to that of the other.
e) We can't make any of the above statements without more information.

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define utility functions

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain the incorrect options

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 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

pats >125 per week to spend on peanut butter and carrots in the fixed ratio of 1 pound of peanut butter to 4 pounds of carrots. Peanut butter costs $1 per pound and carrots cost $0.5 per pound Suppose the price of carrots were to rise from $05 to $1 per pound. By how much will Tom have to reduce his consumption of carrots
Smith and Jones are stranded on a desert island. Each has in her possession some slices of ham (H) and cheese (C). Smith prefers to consume ham and cheese in the fixed proportion of 2 slices of cheese to each slice of ham. Her utility function is given by Us = min(10H, 5C). Jones, on the other hand, regards ham and cheese as substitutes – she is always willing to trade 3 slices of ham for 4 slices of cheese, and her utility function is given by UJ = 4H + 3C. Total endowments are 100 slices of ham and 200 slices of cheese. a. Draw the Edgeworth Box diagram for all possible exchanges in this situation. What is the contract curve for this exchange economy? b. Suppose Smith’s initial endowment is 40 slices of ham and 80 slices of cheese (Jones has the remaining ham and cheese as her initial endowment). What mutually beneficial trades are possible in this economy and what utility levels will Smith and Jones enjoy from such trades? c. Now imagine a new endowment in which Smith has 60 slices…
Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility from owning a toothbrush, but for the consumption of every tube of tooth paste he gains a utility of 2 utils – but only if he owns a tooth brush. Without a tooth brush, Andrea gains no utility from consuming tooth paste. In addition, after consuming 10 tubes of tooth paste, a toothbrush needs to be replaced, i.e., Andrea needs to buy a new one. The current price of tooth brushes on the market is £5 and the current price for tooth paste is £1 per tube. Assume that Andrea aims to maximise consumer surplus. a) In a graph, draw total utility as a function of number of toothpaste tubes, assuming that Andrea buys 1 tooth brush. b) How many tubes will Andrea buy if he wants to maximise consumer surplus, assuming that Andrea can buy any amount of tooth brushes? What is Andrea's total consumer surplus? c) How many tubes will he buy if the current price is £0.50 per tube? e d) Find Andrea's…
Suppose Victoria has a budget of $66 that she spends on movies (Q1) and roller skating (Q₂). The price of movie tickets recently increased from $8 per person to $11 per person, and the price of roller skating decreased from $7 to $6 per person. What is Victoria's new budget constraint? Provide your answer below: FEEDBACK $=$×Q₁ + $x Q₂
1.2 Ann and Bob each own 10 bottles of beer and, altogether, they own 20 bags of peanuts. There are no other people and no other goods in the economy, and no production of either good is possible. Using a to denote bottles of beer and y to denote bags of peanuts, Ann's and Bob's preferences are described by the following utility functions: UA (XA, YA) = TAYA and UB (XB, YB) = 2xB+ YB. In each of the following cases, determine the market equilibrium price ratio and allocation and depict the equilibrium in an Edgeworth box diagram. (a) Bob owns 20 bags of peanuts and Ann owns no peanuts. (b) Bob owns 15 bags of peanuts and Ann owns 5 bags. (c) Ann owns 20 bags of peanuts and Bob owns no peanuts.
only question 1
1. Suppose you are considering to make a decent holiday dinner. In this year, to be creative, you are thinking to put Copper River Salmon from Alaska (fillet) and fresh Atlantic Lobsters from Maine as entrée on the table. Use the information given, to finish the questions below. (1) The table following provides you total utility (U) and marginal (MU) from consuming Salmon and Lobster. Suppose your total utility of Salmon consumption (U1) is a function of the units (Q as pound or lbs.) of salmon consumed, as U1 =. =/400Q. Similarly, your total utility of Lobster (U2) has the form as units (Q as lbs.) of lobster consumed, which is U2 = /36Q + 40. Now fill the empty spots in the table using the information given. Total utility and marginal utility of Salmon and Lobster. Copper River Salmon Atlantic Lobster Q (Ibs.) U1 MU1 U2 MU2 1 20.00 20.00 8.72 8.72 2 3 4. 6. 7 8 10 (2) With a certain amount of budget, you are going to purchase both Salmon and Lobsters. To maximize your total…
A consumer has $100 to spend on craft beer and Schweinefleischaft (pork shanks). Suppose craft beercosts $10 per 4-pack if the customer purchases up to five 4-packs. After that, it is $5 per 4-pack. SupposeSchweinefleischaft is $5 per order of pork shanks.(a) Draw the budget constraint for this consumer, with craft beer on the horizontal axis and Schweine-fleischaft on the vertical axis.(b) Will the consumer ever purchase exactly five 4-packs of craft beer? Explain why, using both thegraph in part (a) and words.
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