Nadia likes spare ribs, R, and fried chicken, C. Her utility function is U = 10R°C.Her weekly income is Y = $180, which she spends on only ribs and chicken.8-If she pays $20.00 for a slab of ribs and $10.00 for a chicken, what is her optimalconsumption bundle?7-Nadia's optimal consumption bundle contains slabs of ribs and fried6-chickens. (Enter numeric responses using integers.)3-2-189 10 11 12 13 14 15 16 17 18Chickentv21DIIDD80F7F8F9F10F2F3F4F5F1@#3$%&123578.9.QWERTYAFGH.KCVMoptioncommandcommandof.. .-V -BN

Nadia likes spare ribs, R, and Fried chicken, C. Her utility function is U(R,C) = 10R2C Her weekly…

Answered: Nadia likes spare ribs, R, and fried…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Jasper utility function for beer and pizza can be expressed as: U(B,P) = BXP Suppose beer costs $5 per glass, pizzas cost $10 each, and Jasper has a total of $30 to spend. Assume Jaspeer is allowed to purchase fractional amounts of each good. Part A) Based on the above information, what is Jaspeer's optimal amount of beer? Enter the number below. glasses Beer = 3 Part B) Now suppose the price of beer falls from $5 down to $3. Calculate the following and fill in the blanks below. When necessary, round answers to two places after the decimal. (Hint: find the decomposition basket to calculate the substitution and income effects). Jasper's total effect on beer is to increase total consumption by glasses of beer. Jasper's substitution effect is to increase beer consumption by 0.28 Jasper's income effect is to increase beer by 1.12 glasses of beer. glasses of beer.
Kai spends his income on lime (L) and ginger water (G). Lime is priced at $2, while ginger water costs $1. Suppose Kai has $30 to spend and his utility function can be represented as U(L,G) = L0.5 G0.5 What is the optimal number of lime and ginger water for Kai to purchase? b. How much utility does this combination bring him?
Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $
Suppose you had a budget of $20.00 and the prices of a burger and a slice of pizza are $5.00 and $2.00 respectively. What would be your optimal consumption bundle?
Huang is determining how much Coke and Pepsi he will buy. Use the information in italics to answer the bolded question below. • Huang's preferences for Coke (C) and Pepsi (P) are represented by the following utility function: U = 2C + 3P • Huang has $12 to spend on soft drinks. • The price of Coke (P) is $0.50/can. • The price of Pepsi (Pp) is $1.00/can. Which of the following statements referring to Huang's preferences is incorrect. O Huang does NOT experience diminishing MRS. If Huang gives up two cans of Pepsi, he needs to purchase 3 cans of Coke to remain equally satisfied. Pepsi and Coke are perfect substitutes for Huang O None of the above statements are incorrect.
You currently have (x, y) = (8, 2) and the utility function U(x, y) = min(x, 4y ). How many units of X are you willing to give up to get another unit of Y?
Please answer carefully and explain in as much detail as possible.
Focus on parts e-h
Lorenzo enjoys going to the theater to see plays, and he also enjoys going to rock concerts. The following diagram shows two of Lorenzo's indifference curves for going to plays and concerts. With Lorenzo's initial budget constraint (BC1), he chose to go to five concerts and three plays per month (point X). Then his budget constraint shifted to BC2, and he chose to go to four concerts and six plays per month (point Y). PLAYS 10 0 4 5 CONCERTS BC 8 Show Transcribed Text BC 10 C Of the following choices, which could have shifted Lorenzo's budget constraint from BC₁ to BC₂? Check all that apply. The price of theater tickets increased while his income and the price of concert tickets stayed the same. His income decreased while the prices of theater and concert tickets stayed the same. His income increased while the prices of theater and concert tickets stayed the same. The prices of both theater and concert tickets decreased while his income stayed the same. Based on Lorenzo's consumption…
Lucas likes lemon soda (X) and chips (Y). His utility function is given by: U (X, Y) = X0.2Y0.8 He earns $40 per week to spend on lemon soda (X) and chips (Y). The prices of lemon soda and chips are $2 and $4 respectively. Find out Lucas’s utility-maximizing bundle of lemon soda and chips (X*, Y*). Set up the utility-maximization problem and find out the price ratio of these two goods. Find out Lucas’s marginal utility of lemon soda (MUX) and marginal utility of chips (MUY). Calculate the MRSXY . Set up the optimal tangency condition and solve for Y in terms of X. Solve for Lucas’s optimal consumption bundle of lemon soda (X*) and chips (Y*). Draw the optimal consumption bundle on the budget constraint BC1 in Q1. Denote it as Bundle A. Make sure to indicate the optimal consumption of lemon soda (X*) and chips (Y*). Draw an indifference curve that is tangent to the budget constraint at Bundle A. Calculate the value of the MRSXY (the value not the formula) at the optimal…
Suppose Mia's utility function on lemon soda (X) and chips (Y) is given by U(X,Y) = X0.5Y0.5 She has $80 per month to spend on lemon soda (X) and chips (Y). The prices of lemon soda (PX) and chips (PY) are $2 and $4 respectively.a. Solve for her optimal consumption bundle of lemon soda (X*) and chips (Y*)? i. Optimal Consumption in lemon soda (X*) : ii. Optimal Consumption in chips (Y*) : b. Suppose the price of lemon soda (X) increases to $8, what is the new optimal bundle? i. Optimal Consumption in lemon soda (X*) : ii. Optimal Consumption in chips (Y*) :
Fang likes playing badminton with her friends. Her utility function for playing badminton every week is given by U(t) = 11t – 2t2, where t is measured in hours. They play on a badminton court, which they can rent per hour. Suppose the current price to play on the badminton court is £2.50 per hour. How many hours should Fang play if she wishes to maximise her utility? Explain what we mean by the principle of diminishing marginal utility. Does the principle apply in Fang’s case? Explain why. In a diagram with income in pound sterling on the horizontal axis and quantity on the vertical axis, show the relationship between Fang’s budget and the number of hours that would maximise her consumer surplus.

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