not use ai please Siblings Ritvik and Roshan each have $50 to spend on Xbox games (X) and all other goods (Y). Games cost $25 each,and all other goods (AOG) have a composite price of $1 each. A friend offers them a $25 Xbox gift card or $25 cash. a. (10 pts) Ritvik loves to play Xbox and finds AOG to be useless. Using an indifference curve and budget line analysis,show Ritviks optimal choice for each option (Xbox gift card and cash gift) as well as the initial choice. Which gift wouldRitvik prefer? Does your graph match your intuition? Explain.b. (10 pts) Roshan likes both gaming and AOG and willchoose to consume positive amounts of both goods. His preferences are convex, and he prefers AOG to gaming. Using aseparate graph from part (a), show Roshans optimal choice for each option (Xbox gift card and cash gift) as well as theinitial choice. Which gift would Roshan prefer? Does your graph match your intuition? Explain.

Here are the graphs for Ritvik's and Roshan's optimal choices:Ritvik's Optimal Choice:Ritvik's…

Answered: Siblings Ritvik and Roshan each have…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 16SQ

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The above figure shows your budget line and indifference curves. What quantities of gasoline and movie rentals would you choose?
Brenda wants to buy new car and has a budget of $25,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to 10, with 10 representing either the most styling or best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $6,250. She also observed that as the gas-mileage index rises by one unit, the price of the car increases by $5,000. Illustrate the various combinations of style (S) and gas mileage (G) that Brenda could select with her $25,000 budget. Using the line drawing tool, illustrate Brenda's budget line. Label this line 'Budget Line'. Carefully follow the instructions above, and only draw the required object. Suppose Brenda's preferences are such that she always receives two times as much satisfaction from an extra unit of styling as she does from gas mileage. What type of car will Brenda choose?…
Digital Apps per Period 0 1 2 3 4 5 Total Utility of Digital Apps per Period (utils) which 0 50.0 95.0 135.0 171.5 200.0 Marginal Utility (utils) 50.0 45.0 40.0 36.5 28.5 Marginal Utility Portable per Dollars Spent Power Banks (price = $5.97) per Period | 8.4 7.5 6.7 6.1 4.8 0 1 GTA W N 3 4 5 Total Utility of Portable Power Banks per Period (utils) 0 25 47 65 80 89 Marginal Utility (utils) 25 22 18 15 9 Marginal Utility per Dollars Spent (price = $2.70) 9.3 8.1 6.7 5.6 3.3 Consider the table above. Suppose the consumer's income is $26. Does the consumer spend all of her income if she purchases the optimal quantities of digital apps and portable power banks? The optimum quantity of digital apps purchased is and the optimum quantity of portable power banks purchased is. (Enter your responses as whole numbers.) Spending on digital apps is $ and spending on portable power banks is $. (Enter your responses rounded to one decimal place.) Thus, total spending at the consumer optimum is $ the…
Think about a favorite thing you often buy or enjoy. It could be your favorite food, a favorite place to visit, a type of event, or something you make us part of a hobby. As part of this review you will create a chart ( just like the examples of total in marginal utility) showcasing the favorite item. Include the following information: How many you purchase or consume in the course of a day, week, or a month. Marginal utility of additional consumptions The total utility of all consumptions. Let’s assume that the largest utility you get from any one item is 20. Make it as interesting as you can by considering something that is important to you. Fill in the chart.
Donald likes fishing (X1) and hanging out in his hammock (X2). His utility function for these two activities is u(x1, x2) = 3X12X24. (A) Calculate MU1, the marginal utility of fishing. (B) Calculate MU2, the marginal utility of hanging out in his hammock. (C) Calculate MRS, the rate at which he is willing to substitute hanging out in his hammock for fishing. (D)Last week, Donald fished 2 hours a day, and hung out in his hammock 4 hours a day. Using your formula for MRS from (c) find his MRS last week. (E) This week, Donald is fishing eight hours a day, and hanging out in his ham mock two hours a day. Calculate his MRS this week. Has his MRS increased or decreased? Explain why? (F) Is Donald happier or sadder this week compared to last week? Explain.
How do your total and marginal utility change as you stay at home watching the same TV show (not necessarily the same episode) alone all day?
Brenda wants to buy a new car and has a budget of $24,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 0 to 12, with 12 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $2,000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $4,000. (a) Illustrate (for yourself) the various combinations of gas mileage (G) and style (S) that Brenda could select with her $24,000 budget. Place gas mileage on the horizontal axis. • Her budget line is given by 4,000*G + [ Select ] *S= [ Select ] • The X-intercept of her budget line is equal to [ Select ] • The Y-intercept of her budget line is equal to [ Select ]
1
The price of DVDs (D) is $20.00 and the price of CDs (C) is $10.00. Phillip has a budget of $100.00 to spend on the two goods. Suppose that he has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 7 more CDs that he would really like to buy.The price of DVDs (D) is $20.00 and the price of CDs (C) is $10.00. Phillip has a budget of $100.00 to spend on the two goods. Suppose that he has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 7 more CDs that he would really like to buy. 1.) Using the line drawing tool, given the above prices and income, draw his budget line in the figure.Label this line 'L'. 2.) Using the point drawing tool, and considering what Phillip has already purchased and what he still wants to purchase, identify the three different bundles of CDs and DVDs that he could choose. Label these points 'bundle 1', 'bundle 2', and 'bundle 3'. (Assume that he cannot purchase fractional units) Carefully follow the…
The table details the total utility that J.J. gets from going to see basketball and hockey games during a month. J.J. had $120 to spend. Calculate the marginal utility and the marginal utility per dollar spent for both basketball and hockey given that the price is $20 and $30 respectively. Based on your calculations: how many basketball games would he attend? how many hockey games would he attend?
Styles 15. Damian Matthews is busy. He allocates his free time between watching movies and working out at the gym. The table below shows his utility from the number of times per week he watches a movie or goes to the gym. Damien has 14 hours a week to spend on movies or the gym (think of hours like $ of income here). Each movie takes 2 hours. Each gym trip takes 2 hours. Q of Gym Total Q of Movie Total Utility visits Utility from visits from Gym Visits movies 100 1 60 180 110 3 240 3 150 4 280 4 180 310 190 330 195 340 7 197 a) What bundles of gym visits and movies can Damien consume if he spends 1) all his time in the gym or 2) all his time watching movies? b) Calculate the marginal utility of each gym visit'and movie. Then calculate the Marginal Utility per hour of each activity. c) How should he allocate his time to maximize his utility? 12
If at a quantity consumed of 1 unit, total utility equals 25 and marginal utility equals 25, and at a quantity consumed of 2 units, total utility is unknown and marginal utility is 20, and at a quantity consumed of 3 units, total utility is 57 and marginal utility is unknown, what is marginal utility of the third unit?

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