PROBLEM (3) A consumer has preferences on Amazon original shows (x), and the composite good (y)described as u(x,y) = x'y (HINT: MUx= 2xy and MUy = x²) and she has I = $300 budget in total. Assume py=$1, so we can think of y as the saved dollars in her pocket for other uses. Now, if she is not an amazon prime member,each show costs px = $10, but if she is a prime member, then px(a) Draw her feasible budget set on the x-y axis for the no-prime-membership case, and the prime-membershipcase, separately.%3D$4. Amazon prime membership costs $120.(b) If she chooses not to be a prime member, what is her optimal bundle (x,y) ?(c) If she chooses to become a prime member, what is her optimal bundle (x,y)?(d) What is her optimal utility in (b)?in (c)? Would she want to become a prime member?

Note: "Sorry" since you have posted multiple sub-parts of a question. I will do only first three. If…

PROBLEM (3) A consumer has preferences on Amazon original shows (x), and the composite good (y) described as u(x,y) = x²y (HINT: MUx= 2xy and MUy= x2) and she has I = $300 budget in total. Assume py= $1, so we can think of y as the saved dollars in her pocket for other uses. Now, if she is not an amazon prime member, each show costs px = $10, but if she is a prime member, then px = $4. Amazon prime membership costs $120. (a) Draw her feasible budget set on the x-y axis for the no-prime-membership case, and the prime-membership case, separately. (b) If she chooses not to be a prime member, what is her optimal bundle (x,y) ? (c) If she chooses to become a prime member, what is her optimal bundle (x,y)?

PROBLEM (3) A consumer has preferences on Amazon original shows (x), and the composite good (y) described as u(x,y) = x²y (HINT: MUx= 2xy and MUy= x2) and she has I = $300 budget in total. Assume py= $1, so we can think of y as the saved dollars in her pocket for other uses. Now, if she is not an amazon prime member, each show costs px = $10, but if she is a prime member, then px = $4. Amazon prime membership costs $120. (a) Draw her feasible budget set on the x-y axis for the no-prime-membership case, and the prime-membership case, separately. (b) If she chooses not to be a prime member, what is her optimal bundle (x,y) ? (c) If she chooses to become a prime member, what is her optimal bundle (x,y)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Reese thinks peanut butter and chocolate are great when separate, but when they combine they are even more epic. In other words, Reese likes to eat either peanut butter or chocolate, but when he eats them together, he gets additional satisfaction from the combination. His preference over peanut butter (x) and chocolate (y) is represented by the utility function: u(x, y) = xy + x + y Which of the following is NOT true about Reese’s preference? (a) The MRS decreases when x increases.(b) The preferences are homothetic.(c) The marginal utility of y is higher when x = 10 than when x = 5.(d) For any a > 0, Reese prefers the bundle (x =a/2 , y = a/2 ) over either the bundle (x = a, y = 0) or (x = 0, y = a).
Karen has perfect complement preferences over toothbrushes B and toothpaste P, with the associated utility function U(B,P) = min (3B, 2P). Suppose the price of a toothbrush is $6, the price of toothpaste is $4 a tube, and she has $72 to buy her entire year's supply of toothbrushes and toothpaste. How many toothbrushes and tubes of toothpaste will she buy?
2) Which of the following utility functions represent the same preferences? Explain. a) U (x₁, x₂) = X₁ X₂ b) W (x₁, x₂) = 5lnx₁ +5lnx₂ c) V (x₁, x₂) = x₁¹/3x₂ ¹/3 - 0.8 d) Z(x₁, x₂) = 0.5x₁ + 0.5x₂
Typed Plzzzz And Asap I will upvote
3. You are given the following total utility function: V(C1, C2) = U(c,) + U(c2) = c,/2 + c2/4 а. Determine the MRS in terms of c1 and c2. If c = (C1,C2) = (2,2), What is the value of MRS evaluated at this point?
Problem 1 (25pts) Benjamin spends his time either watching movies (x1) (he uses "on demand" option, cable TV) or listening to songs MP3 downloaded from the Internet (x2). His preferences are described by - U(x1, x2) = ln(x1) + In(x2) - a) Derive Benjamin's demand for movies and MP3 files as a function of prices p1, p2 and his income m. (do not use Cobb Douglas formula but rather derive demand using "two secrets of happiness"). b) Fix the price of MP3 at p2 = 1, and income on m = 10. Find the price offer curve (give an exact formula x2 = f(x1)) and plot it in the commodity space. Find the demand curve x1 = f(p1) and plot it in the graph (with p₁ on vertical axis and x1 on horizontal axis). == c) Is x1 an ordinary good or a Giffen good? Explain. d) Now fix p₁ = 1 and p2 = 1. In the commodity space, plot the income offer curve. In addition, in two separate graphs, plot Engel curves for both movies and MP3 files. Argue that the two commodities are normal (not inferior). e) For the demand…
Find the optimal bundle using the following utility functions and budget constraints. 1. U(x,y)=lnx+yand2x+y=10 2. U(x,y)=3x+2yand3x+2y=24 3. U(a,z)=3a+2zand3a+6z=24 4. U(a,z)=a2z2 and4a+2z=485. U(x,z)=a2z3 and3a+2z=36
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.
A, B, C
(a) A consumer with income I=120 facing prices pX = 4 and pY = 8 for two goods X and Y (for each good she prefers more to less, with diminishing MRS) chooses optimally to consume 12 units of X. If the prices change and now pX = 6 and pY = 4, what is the possible range for her new optimal X consumption? (b) Forget about (a). A consumer with I=$240 budget is shopping for apples (x) and oranges (y). Apples cost $1 each up until 60 units; thereafter each apple costs $2. Similarly, oranges cost $1 each up until 60 units, and thereafter $2 each. Draw the graph of feasible set of bundles for the consumer with relevant points and numbers (shade the feasible area), no explanation needed. (c)(HARD!) In (b), calculate the optimal bundle assuming the consumer’s utility function is u(x,y) = x5y.
Urgent
Solution sent me 20 very fast