This is macroeconomics theory Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by:U(X1, X2) = x₁4xa) What is the consumer's demand for x, as a function of income and prices? What is the consumer'sdemand for x₂ as a function of income and prices? Use Lagrange method or your intuition.b) What percentage of income does the consumer spend on x₁? What percentage of income does theconsumer spend on x₂?Page 3

The consumer maximizes the utility subject to the budget constraint. Demand function represents…

Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by: U(x₁, x₂) = x₁4x 06 a) What is the consumer's demand for x, as a function of income and prices? What is the consumer's demand for x, as a function of income and prices? Use Lagrange method or your intuition. b) What percentage of income does the consumer spend on x₁? What percentage of income does the consumer spend on x₂?

Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by: U(x₁, x₂) = x₁4x 06 a) What is the consumer's demand for x, as a function of income and prices? What is the consumer's demand for x, as a function of income and prices? Use Lagrange method or your intuition. b) What percentage of income does the consumer spend on x₁? What percentage of income does the consumer spend on x₂?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following dialog between Amy, an economics student who currently studies macroeconomics, and Deborah, her teaching assistant.AMY: Hi Deborah, I'm working on my Aplia homework and realized that I do not understand the definition of the labor force very well. Does it include discouraged workers? DEBORAH: Hi Amy, the conventional definition of the labor force excludes discouraged workers. This is because they gave up looking for jobs . Also, be sure not to mistake discouraged workers for part-time workers. The key difference is that the latter cannot find suitable full-time jobs . AMY: I think I understand it now, thank you. DEBORAH: Let me ask you a question to see if you can apply your knowledge. Consider an economy with 20 full-time workers, 16 part-time workers, 10 workers who have been laid off but are actively looking for a new job, and 3 formerly full-time workers who have been without a job for over a year, failed to find any, and gave up looking. Can you…
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