mar 75 I1 2 0, 12 2 0 s.t. 8* +4* r, <1600 • The marginal utility of good 1: MU, = .25 • The marginal utility of good 2: MU2 = 75 × Equation Description: A consumer is attempting to maximize utility subject to a budget constraint.Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4; and, consumer income is $1600. Marginal utility of good 1. equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the 75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is.75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O 79.2 utils O None of the above O 19.9 utils 6.8 utils O 191.7 utils O 333.3 utils

mar 75 I1 2 0, 12 2 0 s.t. 8* +4* r, <1600 • The marginal utility of good 1: MU, = .25 • The marginal utility of good 2: MU2 = 75 × Equation Description: A consumer is attempting to maximize utility subject to a budget constraint.Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4; and, consumer income is $1600. Marginal utility of good 1. equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the 75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is.75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O 79.2 utils O None of the above O 19.9 utils 6.8 utils O 191.7 utils O 333.3 utils

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. [In class, we noted that the consumer will spend all their money if they have in- creasing preferences. Here, we give a calculus-based condition for the consumer to spend all their money, that doesn't assume more is always better. The con- dition is a stronger version of what is sometimes called "local non-satiation".] Let E X, and let MU, denote the marginal utility for good i € {1,2} at r. (a) Suppose some good i has MU, #0 (it could be positive or negative), and suppose the consumer is not spending all her money at bundle x (that is pr 0 if MU; <0. Argue that the consumer would not optimally choose r. x (b) Suppose MU₁(x) = MU₂(x) = 0, the good is affordable (p ≤ m), and u is concave. Explain why r is optimal.
ADVANCED ANALYSIS Let: MUA/PA=ZA = 10 - 1 Instructions: Enter your answers as a whole number. How is the $10 best allocated between A and B? MUB/PB=ZB=21-2y, where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and B-that is, x+y=10. Note: Px = $1 and Py = $1. LA on A and $ on B How much utility will the marginal dollar yield? utils Prev 1 of 7 Exit Submit Next > Check my work
1. This question will let you examine/explore a more interesting utility func- tion than the simple example discussed in class as there will be both cross-price elas- ticity and an inferior good. Suppose you are told a consumer has the following utility function: U (9219₂) = 9z+√9z+ 9₂ You should assume income is Y, the price of good r is P2, and the price of good z is P₂. This question will ask about several concepts discussed in lecture. (a) What is the Marshallian demand for goods x and z? I.e. find (qq) for both interior solutions and corner solutions. Note: the outcome is "ugly" for the interior section and both corner should include constraints, i.e. limits using Y relative to f(P, P₂). Hint: if solving using MRS = MRT, can use this information again in part (d). (b) Suppose you are told P₂ = $8 and P₂ = $1. Create a graph showing the Income Consumption Curve (ICC) for Y = {$12.25, $35, $49, $70, $98). Be sure to clearly label the graph. Based on the ICC, which of the goods is…
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A consumer's ordinary demand curve for x1* (p1, p2, 1) = [² p1². How will a 2% increase in income affect this consumer's consumption of x1? O 1% 2% 3% 4% 5%
Solve this pls
Suppose the consumer's utility function is given by U(x,y) = X3/5y2/5, and the exogenous variables are given by M = 500, Px = 5, and Py = 4. Price of y changes to Py = 2. What is the income effect ony?O A.-14.53O B. +14.53O C. +24.21O D. +25.79O E. None of the above Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Q37
Suppose Duncan budgets $20 a week for entertainment. He can either go bowling for $4 a game, or play mini golf for $6 a game. Duncan maximizes his total utility by bowling twice and playing two games of mini golf. If the marginal utility from his second game of mini golf equals 12, what is the marginal utility per dollar from his second game of bowling? O 2 4-