Şeyma has the following utility function: U(x, y) = x/2y1/2 and faces the%3Dbudget constraint: M = Pxx + P,y. Suppose M = 120, P, = 1 and P = 4. Find the optimal xand y.

Maximizing, U(x,y)=x1/2y1/2 subject to, M=Pxx+Pyy Now, y=1PyM-Pxx Using the above equation in…

Answered: Şeyma has the following utility…

Şeyma has the following utility function: U(x,y) = x'/²y+/2 and faces the budget constraint: M = P,x + P,y. Suppose M = 120, P, = 1 and P = 4. Find the optimal x and y.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 1WNG

See similar textbooks

Related questions

Q: Find the marginal utility (MU) and marginal rate of substitution (MRS) of following utility…

A: Marginal Utility (MU) and Marginal Rate of Substitution (MRS) are two important concepts in…

Q: (3) Graph the demand curves associated with the utility function u(x, y) = x0-.25 ,0.75 and budget…

A: The demand(dd) function of a Cobb Douglas utility function with the following equation is given:…

Q: Suppose the price of a candy bar is $1.25, the price of a bag of chips is $1.75, and the budget is…

A: If price of only one good increases (decreases), budget line rotates inward (outward) along the axis…

Q: Reid has the following utility function. U = 24m1/3d1/2 where U is Reid's total utility, m is the…

A: (a) U = 24m 1/3 d 1/2 – α (m+0.6 d -25) MU m = 1/3*24m-2/3 d 1/2 – α*1 MU d= ½ *24 m 1/3 d-1/2 -…

Q: Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M,…

A: A utility-maximizing consumer chooses the bundle of goods that gives him/her maximum satisfaction.…

Q: Utility Function: U(X,Y)=X¹/2Y1/2 Budget Constraint: X+2Y=12 If the price of good Y changes to Py=3,…

A: Utility function: ..........(1)Budget constraint: ......…

Q: A consumer has the following demand function for good 1: x1 = (1/4)(m/p1) The original price of the…

A: Individuals (consumers) directly concerned within the acquisition, use, and disposal of economic…

Q: The marginal utility for the third unit of X is 60 utils, and the marginal utility for the fourth…

A: The law of diminishing marginal utility states that as consumer consumes more and more of a good,…

Q: Aji's utility function for Blueberry (b) and Raspberry (r) is given as U = f(b, r); Budget…

A: Answer: Given, Budget constraint: 100=4b+5rWhere,b=number of blueberryr=number of raspberry (1).…

Q: Consider the following utility function and budget constraint: U = (beer^.4)*(pizza ^.6) 50 =…

A: The utility function is given as The budget equation is given as

Q: You consume music (M) and concert tickets (C). Your utility function is U(M, C) = M1/4C3/4. The…

A: A consumer maximizes her or her utility given his or her budget constraint at the point where the…

Q: Victoria has the following utility function: U(x,y) = x½y½ and faces the budget constraint: M = Px +…

A: Given, U(x,y) = x12y12 M = 120 Px = 4 Py = 1 M = Px + Py 120 = 4x + y ------------ equation…

Q: An individual’s utility function is given by U = x1 √ x2 where x1 and x2 denote the monthly…

A: A utility function is a mathematical expression that represents an individual's preferences for…

Q: Given a utility function of 2 goods X and Y: U (X, Y) = X +Y4, the marginal utility of X [ Select ]…

A: According to the question, utility function is given as : U(X,Y)=X4+Y4 Marginal utility of good X=…

Q: c) From the following budget line and the utility function, calculate the amount of two commodities…

A: Budget Constraint is given as:- 2500 = 20X + 30Y Utility Function is given as:- U = 300X0.6Y0.7

Q: A consumer currently spends a given budget on two goods, X and Y, in such quantities that the…

A: Utility maximization is the idea that individuals and organizations seek to achieve the highest…

Q: Given a Utility function: U(x,y) = 3xy. Suppose the Price of x is 2, and the price of y is 4.…

A: Budget constraints shows the relationship between the quantity of two goods , their prices and the…

Question

Şeyma has the following utility function: U(x, y) = x/2y1/2 and faces the
%3D
budget constraint: M = Pxx + P,y. Suppose M = 120, P, = 1 and P = 4. Find the optimal x
and y.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider the utility function u(x1, x2) = x10.5x20.5. Find the Marginal Utilities with respect to good x1 and x2.
Biwei’s utility function U=4XY, where X is consumption of beer and Y is consumption of pizza. For this utility function, the marginal utility of X is MUx = 4Y; the marginal utility of Y is MUY = 4X. 1) Suppose Y = 3. Calculate Biwei’s utility for X = 2, 3, 10, and 11. For a given level of Y, does good X display diminishing marginal utility? 2) Suppose X = 3. Calculate Biwei’s utility for Y = 2, 3, 10, and 11. For a given level of X, does good Y display diminishing marginal utility?
The utility of a consumer derives from consuming the two goods X and Y can be assumed to be determined by the utility functionU(X,Y)= 4X03Y05. If good X costs 10 birr a unit and good Y costs 15 birr a unit and the consumer's income is 120 birr. What combination of X and Y that will maximize utility?
Suppose the function for the utility from good c is denoted as U(c)=2c1/2 . Which of the following expressions indicates the marginal utility of c?
Hello, I am not understanding this practice problem. I dont know how to solve the second half .
Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers (C). Her market research has found that consumer demand for this product can beexpressed as a function of the price of the charger itself (PC), the price of phones (PF), andthe consmer’s income (I). Consumer demand can be described by the function C(PC, PF, I) =(i−10PC)/ (PF) Suppose her chargers come in all different capacities to meet any quantity demanded, so youdon’t need to worry about restricting C to whole numbers for this problem. (a) Does this product satisfy the law of demand?Explain. (b) Calculate consumers’ income elasticity as a function of the parameters. (c) Anaya is targeting a market whose income is expected to double over the next five years.Explain whether she should expect the demand for chargers to increase or decrease, andby how much, using the language of normal, inferior, luxury, and necessity goods. (d) Calculate the cross-price elasticity ofCwith respect toPF. (e)…
True/False Marginal utility is 0 for the Consumption of the very first unit.
Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers (C). Her market research has found that consumer demand for this product can beexpressed as a function of the price of the charger itself (PC), the price of phones (PF), andthe consmer’s income (I). Consumer demand can be described by the function C(PC, PF, I) =(i−10PC)/ (PF) Suppose her chargers come in all different capacities to meet any quantity demanded, so youdon’t need to worry about restricting C to whole numbers for this problem. (a) Does this product satisfy the law of demand?Explain.
compute the marginal utility of good X (MUX) and the marginal utility of good Y (MUY).b. U=U ( X ,Y )=X0.5Y0.4
1. Jan has the following utility function for broccoli: U(B) = 54B - 0.5B³ a) What is Jan's marginal utility function?
Charlie's utility function is (1-a) U(xa, XB) = Ax“xr-) where A > 0 and a > 0
Given that: U(X,Y) = X1/2+Y1/2 and the demand functions are: X=0.218I Y=0.152I When I = 50, X = 10.9 and Y = 7.6 What is the marginal utility of income?