Suppose a consumer purchases food X and clothing Y. The utility function of the consumer is given by: U(X,Y ) = XY + 5Y and the budget /income/ of the consumer is 200 ETB. And also the price of food is X P and the price of clothing is Y P . Then drive the equation of consumer’s demand function for food and clothing.

Q: What is the law of diminishing utility? Please explain with a few examples.

A: Law of diminishing marginal utility says that as we consume more and more units of same good then…

Q: Jerry spends his entire budget on bread and gasoline. His preferences are complete, transitive,…

A: Substitution Effect: This refers to the change in quantity demanded of a good or service as a result…

Q: Consumer Theory Daniel spends all his money on only two goods: chocolates (good 1) and milkshakes…

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Q: a)Assume that the typical consumer always spends a small share of her overall budget on Vietnamese…

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Q: Explain the correlation between marginal utility and consumer's

A:

Q: What is the axiom of consumer choice that implies that consumers spend all their income in order to…

A: The maximum utility is maximized where the last $ spent on each goods provide exactly same marginal…

Q: What is the law of diminishing utility? Explain with proper example.

A: The want satisfying power of a commodity is referred to as the utility.

Q: A consumer has a utility function given by U = x0.25 y0.75 „He has an income of £100, the price of…

A: Answer: Given, Utility function: U=x0.25y0.75 Income M=£100Price of good xPx=£5Price of good yPy=£10…

Q: Consider a consumer that consumes 2 teaspoons of sugar with each cup of coffee. For each cup of…

A: It can be defined as the  quantitative measure of an individual level of satisfaction and preference…

Q: Suppose a consumer has a utility function given by U(X,Y) = MIN(X, 2Y). The consumer has $90 to…

A: U=MIN(X, 2Y)M=$90Py=1

Q: Questions 1. Will's utility from vacations (91) and meals (92) is given by the function U(V, M) = 91…

A: Step 1:Step 2:

Q: Sofia has set aside $50 to spend on DVDs and movie tickets. The table shows Sofia's marginal utility…

A: Marginal utility refers to the additional utility enjoyed by a consumer due to consumption of an…

Q: Sally consumes two goods, X and Y. Her utility function is given by the expression U = 3XY². The…

A: An indifference curve depicts the combination of two products in several quantities that gives an…

Q: U(x, y) = xayb A consumer maximises utility subject to a budget constraint M = Pxx+Pyy Where px is…

A:

Q: please help

A: Use equilibrium condition to solve for x and y in terms of prices Px and Py.

Q: Suppose Al is currently consuming five movies and two concerts per month. If his utility function is…

A: The theory behind utility is simple. A certain amount of satisfaction, value, or benefit is gained…

Q: Bob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20…

A: The utility refers to wants  satisfying power of a commodity. Marginal utility is the additional…

Q: Define the Marginal Rate of Substitution between two goods (X and Y). If a consumer’s preferences…

A: Answer: Definition of the marginal rate of substitution (MRS): The marginal rate of substitution…