**Economics Assignment: Utility and Demand Analysis****Question 1**Sally consumes two goods, X and Y. Her utility function is represented by the expression $ U = 3XY^2 $. The marginal utilities of X and Y are given by the equations:- $ MU_X = 3Y^2 $- $ MU_Y = 6XY $The market prices are $10 for X and $5 for Y, with Sally's income being $500.a) **Budget Line**: Illustrate Sally’s budget line, indicating where it intersects the vertical and horizontal axes.b) **Utility Maximization**: Determine the X, Y combination that maximizes Sally's utility, adhering to her budget constraint. Partial quantities can be used. [Hint: Utilize the equal marginal principle to find the optimal X to Y ratio and apply it in the budget equation.]c) **Utility Calculation**: Calculate Sally’s utility.d) **Price Change**: If the price of X rises to $15, determine the new ratio in which Sally will consume X and Y.**Question 2**The domestic demand for wheat is given by $ Q_{DD} = 1000 - 25P $. The export demand is $ Q_{DE} = 500 - 25P $.Draw the domestic, export, and aggregate demand curves for wheat. Ensure to label the intercepts and the kink point.**Question 3**Consider that John allocates his $240 income between sushi and canned tuna. Let unit prices and quantities be variables in analyzing his consumption choices. (Further details would continue from the next section.)---This assignment applies concepts from microeconomics to solve practical problems involving utility maximization and demand analysis.

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Ques 1. Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY². The marginal utility of X and marginal utility of Y are given by the following equations: MUX-3Y² and MUY=6XY The current market price for X is $10, while the market price for Y is $5. Sally's current income is $500. a) Draw out Sally's budget line. (show the points where it meets the vertical and horizontal axes) b) Determine the X,Y combination which maximizes Sally's utility, given her budget constraint. (Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the equal marginal principle to find the optimal ratio of X to Y and then use that in the budget equation] c) How much is Sally's utility? d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?

Ques 1. Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY². The marginal utility of X and marginal utility of Y are given by the following equations: MUX-3Y² and MUY=6XY The current market price for X is $10, while the market price for Y is $5. Sally's current income is $500. a) Draw out Sally's budget line. (show the points where it meets the vertical and horizontal axes) b) Determine the X,Y combination which maximizes Sally's utility, given her budget constraint. (Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the equal marginal principle to find the optimal ratio of X to Y and then use that in the budget equation] c) How much is Sally's utility? d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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