Suppose costumer 1's endowment is (a₁, b₁) = (3, 7) and consumer 2'sendowment is (a2, b2 ) = (7, 3). Consumer 1 has preferencesu₁ (a₁, b₁) = a₁b₁, and consumer 2 has preferences u₂(a2, b₂) = a₂b₂. IfPa = Pb = 1 at the competitive equilibrium, how much of good b doesconsumer 1 consume at the competitive equilibrium?O 1OOOOO2456789

In a competitive market, the sum of the consumer preferences is maximized subject to the…

Suppose costumer 1's endowment is (a₁, b₁) endowment is (a2, b₂) = (7,3). Consumer 1 has preferences u₁ (a₁, b₁) = a₁b₁, and consumer 2 has preferences u2 (a2, b2) = a2b2. If Pa = Pb = 1 at the competitive equilibrium, how much of good b does consumer 1 consume at the competitive equilibrium? O 1 2 4 5 6 7 8 9 = (3, 7) and consumer 2's

Suppose costumer 1's endowment is (a₁, b₁) endowment is (a2, b₂) = (7,3). Consumer 1 has preferences u₁ (a₁, b₁) = a₁b₁, and consumer 2 has preferences u2 (a2, b2) = a2b2. If Pa = Pb = 1 at the competitive equilibrium, how much of good b does consumer 1 consume at the competitive equilibrium? O 1 2 4 5 6 7 8 9 = (3, 7) and consumer 2's

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Which of these utility functions represent the same preferences as U(x, y)=√√xy? Select one: O a. U(x,y) = 10 √ b. U(x,y) = xy O c. U(x, y) = ln x+lny O d. All of the above represent the same preferences. Show Transcribed Text If an individual's utility function for cream (X) and coffee (Y) is given by U(X,Y)= min(5X, Y), the demand function for cream is given by: Select one: O a. X=1/(5Px) O b. X=1/(P, +5Py) O c. X=1/(P, +0.2Py) O d. X=1/(5P, +Py)
Suppose that consumer has the following utility function: U(X,Y) = x'/3y1/2, Suppose also that Px: 2, Py respectively? %3D 3 and I = 120. What would be the optimal consumption of X and Y at the equilibrium, O 12, 32 48, 8 36, 16 O 24, 24
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3. [In class, we noted that the consumer will spend all their money if they have in- creasing preferences. Here, we give a calculus-based condition for the consumer to spend all their money, that doesn't assume more is always better. The con- dition is a stronger version of what is sometimes called "local non-satiation".] Let E X, and let MU, denote the marginal utility for good i € {1,2} at r. (a) Suppose some good i has MU, #0 (it could be positive or negative), and suppose the consumer is not spending all her money at bundle x (that is pr 0 if MU; <0. Argue that the consumer would not optimally choose r. x (b) Suppose MU₁(x) = MU₂(x) = 0, the good is affordable (p ≤ m), and u is concave. Explain why r is optimal.
When goods are complements, there is a direct relationship between the price of one and the demand for the other. O 1) True O 2) False
2. General Equilibrium Consider a market with two goods, x and z, and two consumers, A and B. The utility functions for consumers A and B are as follows UA ÜB 2 1 == XBZB and the initial endowments for each consumer are @ eA = (4,2) еB = (2,6) where consumer B is endowed with 2 unit of good x and 6 units of good z, respectively. a) Draw the Edgeworth Box (Don't worry about the shape of the utility curves. Just pick a general shape that we have used before). b) Derive the contract curve.
- Assume an individual has quasilinear preferences of the form U(x1,x2) = 3x1¹2 + 2x2. If the price of Good 1 is $1 and the price of Good 2 is $2, how many additional units will the individual consume of Good 2 if her income increases by $1, assuming we're at an interior optimum? A. B. C. D. The individual's consumption of Good 2 will increase by 1/2 unit. The individual's consumption of Good 2 will increase by 1 unit. The individual's consumption of Good 2 will decrease. The individual's consumption of Good 2 will not change.
Solve this pls
12 There are two goods and John's preferences can be represented by u: R²0 R given by u(x) = x₁³x2³. His income and price of the two goods are given by (M, P1, 20 P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve. In John's optimal bundle, he spends the same amount on good 1 as good 2. John's preferences satisfy local non-satiation. At John's optimal bundle, his bang per buck of good 1 equals his bang per buck of good If we change John's utility function to u(x) = In (17 +x₁x₂) then John's optimal bundle remains unchanged. If we change the budget set to (M, P1, P2) = (24, 2, 4) then John's optimal bundle remains unchanged.
please only do: if you can teach explain steps of how to know of each cases? of the x
case 1,2,3
Suppose that at a price of 25 cents per orange, 300 consumers each demand 2 oranges, and at a price of 20 cents per orange, 400 consumers each demand 4 oranges. Therefore, the market demand for oranges is at a price of 25 cents per orange and at a price of 20 cents per orange. Multiple Choice 300; 400 O 1,200; 3,200 600; 1,600 O 2; 4