Question 2 Emma's daily utility function is U = 8√R+4M, where R represents the pounds of rice eaten in a day and M represents the money spent in other food. Marginal utility for rice and other food is: MUR=4R-1, MUM = 4. (a) Assume price for rice is pr, price for other food is pm and Emma's income is m. Derive the demand function given prices p, Pm and income m. (b) Assume initially the price for rice is $0.5 per bowl. The price of other food is $1. Emma's daily income is $10. How much R and M will she buy? (Don't round off fractions) (c) Now the price of rice increases to $1 per bowl. The price of other food is still $1. Emma's daily income is still $10. How much R and M will she buy now?
Question 2 Emma's daily utility function is U = 8√R+4M, where R represents the pounds of rice eaten in a day and M represents the money spent in other food. Marginal utility for rice and other food is: MUR=4R-1, MUM = 4. (a) Assume price for rice is pr, price for other food is pm and Emma's income is m. Derive the demand function given prices p, Pm and income m. (b) Assume initially the price for rice is $0.5 per bowl. The price of other food is $1. Emma's daily income is $10. How much R and M will she buy? (Don't round off fractions) (c) Now the price of rice increases to $1 per bowl. The price of other food is still $1. Emma's daily income is still $10. How much R and M will she buy now?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 6QFR
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Transcribed Image Text:Question 2
Emma's daily utility function is U = 8√R+ 4M, where R represents the pounds of rice
eaten in a day and M represents the money spent in other food. Marginal utility for rice
and other food is: MUR = 4R-, MUM = 4.
(a) Assume price for rice is pr, price for other food is pm and Emma's income is m. Derive
the demand function given prices Pr Pm and income m.
(b) Assume initially the price for rice is $0.5 per bowl. The price of other food is $1.
Emma's daily income is $10. How much R and M will she buy? (Don't round off fractions)
(c) Now the price of rice increases to $1 per bowl. The price of other food is still $1.
Emma's daily income is still $10. How much R and M will she buy now?
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