Can you help me answer these questions it's macroeconomics theory Question 1 (Choice). Emie has two cell phones and obtains positive utility from talking on both. His utility usingAT&T (x₁) and Verizon (x₂) is given by:U(x1, x₂) = x₁05+ x₂0.5The price of calls at AT&T is $1 per unit and the price of calls at Verizon is $4 per unit. Ernie spends $2000 onphone calls per yeara) What is Ernie's optimal bundle? (Hint: You may use the Lagrange Method or simply set the MRS equal tothe price ratio, and plug this into the budget constraint)5001 to Isval vailou aindo or boon zomuenos od sob smoont muminim ad (ai (a) botebooW bas (z) ees shrid 161 noin pilou aill assiq edilylle sohn) (basms) Enohasuvd navig+z+x=(x,12)UEssiq no 022 ebasqa cohe bns 012 a to song onbasmabscb dqsi (sb) What is Ernie's utility at this optimal bundle?Tanil 1) aizs-zod no x bns zixe-yodi no (ix lo ozolsCon69dgang voy nielqz (0 od liwz 10t basmab oh siadw song to agam a sd lliwc) Why is it the case that at the optimal bundle Ernie is using Verizon (the more expensive service)? Whywould he not spend all his money on AT&T (the less expensive service)?

Budget constraints shows the relationship between the two goods, their prices and the income of…

Question 1 (Choice). Emie has two cell phones and obtains positive utility from talking on both. His utility using AT&T (x₁) and Verizon (x₂) is given by: U(x1, x₂) = x₁05+ x₂0.5 The price of calls at AT&T is $1 per unit and the price of calls at Verizon is $4 per unit. Ernie spends $2000 on phone calls per year a) What is Ernie's optimal bundle? (Hint: You may use the Lagrange Method or simply set the MRS equal to the price ratio, and plug this into the budget constraint) 5001 to Isval valu nindo os boon tomuenos odi sob smooni mumini W (d ai (x) SlootebooW bas (2) enese shrid 101 noimmat pilou aill assiq edilylle sohn).(baams) Enoitasu and navig b) What is Ernie's utility at this optimal bundle? Essiq no 022 ebasqe zobe bns 012 ax to spingon Tanil 1) aizs-zsdh no x bns aizs no (xo o l) q diw olsu basmab stb demə (s diqmy voy nielqz31 (0 od liwz 10t bremsbah siadw oing to synes & ad lliw c) Why is it the case that at the optimal bundle Ernie is using Verizon (the more expensive service)? Why would he not spend all his money on AT&T (the less expensive service)?

Question 1 (Choice). Emie has two cell phones and obtains positive utility from talking on both. His utility using AT&T (x₁) and Verizon (x₂) is given by: U(x1, x₂) = x₁05+ x₂0.5 The price of calls at AT&T is $1 per unit and the price of calls at Verizon is $4 per unit. Ernie spends $2000 on phone calls per year a) What is Ernie's optimal bundle? (Hint: You may use the Lagrange Method or simply set the MRS equal to the price ratio, and plug this into the budget constraint) 5001 to Isval valu nindo os boon tomuenos odi sob smooni mumini W (d ai (x) SlootebooW bas (2) enese shrid 101 noimmat pilou aill assiq edilylle sohn).(baams) Enoitasu and navig b) What is Ernie's utility at this optimal bundle? Essiq no 022 ebasqe zobe bns 012 ax to spingon Tanil 1) aizs-zsdh no x bns aizs no (xo o l) q diw olsu basmab stb demə (s diqmy voy nielqz31 (0 od liwz 10t bremsbah siadw oing to synes & ad lliw c) Why is it the case that at the optimal bundle Ernie is using Verizon (the more expensive service)? Why would he not spend all his money on AT&T (the less expensive service)?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...

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