Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently$30). Their Indifference curves are given in the graph below.a) To get the highest utility consistent with their budget, this person will buypairs of shoes and4 concert tickets.b.) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a.Shoes1614121086422Tickets10 12 1416ToolsBudget Line

An indifference curve is a graphical representation used in microeconomics to illustrate a…

Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30) Their indifference curves are given in the graph below. pairs of shoes and concert tickets. a) To get the highest utility consistent with their budget, this person will buy [ b) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a Shoes 16 14 12 10 8 4 2 2 8 Tickets 10 12 14 16 Tools Budget Line

Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30) Their indifference curves are given in the graph below. pairs of shoes and concert tickets. a) To get the highest utility consistent with their budget, this person will buy [ b) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a Shoes 16 14 12 10 8 4 2 2 8 Tickets 10 12 14 16 Tools Budget Line

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 3SQP

See similar textbooks

Similar questions

Suppose that the average consumer has $300, is only choosing between buying shoes (currently $60) and concert tickets (currently $30). Their indifference curves are given in the graph below. a.) To get the highest utility consistent with their budget, this person will buy ____ pairs of shoes and _____ concert tickets. b.) Instructions: On the graph below, use the "Budget Line" tool to indicate a budget line that corresponds to your answer in part a. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
please give answer step by step
EXERCISE 4 Milo spends £27 on stamps (S) and maple candy (C). His preferences for these goods are given by the following utility function: U(S, C) = min {S, 3C). Suppose that price per unit of S is £1.1 and the price per unit of C is £2.1. a) Write down Milo's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. In your graph, indicate the consumption bundle of 12 stamps and 6 maple candies. Can Milo afford this bundle? Explain. b) Find Milo's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. c) If the price of a stamp increases to £1.4, how should Milo's income change for him to be as well off as before this change in prices? d) Discuss the implications of the price change from c) on Milo's optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Milo's demand for stamps and/or…
Question 7 You are currently at the bundle (x, y) = (4, 2) with a utility function U = In(x) + In(y). I offer you one additional unit of x for 2 units of y. Do you make the trade with me? Explain.
13. Shawn likes to consume pineapple smoothies and hotdogs. His preferences are represented by the utility function U(x,y) = 34x - x²/2 + y where x is his consumption of pineapple smoothies and y is his consumption of hotdogs. The price of pineapple smoothies is $2 and the price of hotdogs is $1. If the price of pineapple smoothies increases to $6, the change in Shawn's consumer surplus is: A) -144 B) -128 C) -120 D) -112 E) -90
The prices she's considering are shown in the table below. Calculate the utility for each of the prices in the table. What is the average of the calculated utilities?
1. 2. Suppose Frank enjoys traveling and his utility is a function of the number of airplane trips he takes and the number of bus rides he takes. His utility function is given by U(b,p) = 3b0-4p0.8. A trip on a plane costs $400, a trip on the bus costs $50 and Frank has $3,000 to spend on travel. a. Draw Frank's budget line on a graph with bus trips on the vertical axis. b. Calculate AND INTERPRET the slope of Frank's budget line. c. Draw a representative indifference curve on your graph and provide a function that describes the slope of this indifference curve (i.e., find Frank's marginal rate of substitution). What is the INTERPRETATION of the marginal rate of substitution? d. What two conditions must be met in order for Frank to maximize his utility? e. What are the utility maximizing quantities of plane trips and bus trips for Frank? Given income of $1000, Px = 25 and Py = 40, find (1) a function for the MRS and (2) the utility maximizing consumption bundle for each of the…
Q6) Utility Ratio and Consumption Maximization A consumer downloads 3 movies and 4 apps per week. Suppose the price is $2 per movie and $2 per app, and the marginal utility for this consumption level is 6 for a movie and 8 for an app. Instructions: Round your responses to one decimal place. a. Calculate, show the formula, marginal utility per dollar. ..Per movie ......Per app b. Is this optimal consumption? c. If not, how should they change their consumption to maximize?
Jackie has a budget of $36 per month to spend on snacks. She can spend this budget on bags of potato chips (C) and Hershey chocolate bars (H). Potato chips cost $4 per bag, while Hershey bars cost $1 per bar. The utility that Jackie receives from consuming potato chips and Hershey bars is represented by the following utility function: U=3C2 H. Given that Jackie seeks to maximize her utility, find the number of potato chip bags and Hershey chocolate bars that Jackie will purchase each month.
The above figure shows your budget line and indifference curves. What quantities of gasoline and movie rentals would you choose?
4.4 (0) Phil Rupp's utility function is U(x, y) = max{x, 2y}. (a) On the graph below, use blue ink to draw and label the line whose equation is x = 10. Also use blue ink to draw and label the line whose equation is 2y = 10. (b) If x = 10 and 2y < 10, then U(x, y) If x < 10 and 2y = 10, %3| then U(x, y) (c) Now use red ink to sketch in the indifference curve along which U (x, y) = 10. Does Phil have convex preferences?. 15 10 5 10 15 20 20
2. Sally consumes two goods, X and Y. Her utility function is given by the expression U = 3XY². The current market price for X is £10, while the market price for Y is £5. Sally's current in come is £500. (a) Sketch a set of two indifference curves for Sally in her consumption of X and Y. (b) Write the expression for Sally's budget constraint. Graph the budget constraint and determine its slope. (c) Determine the X,Y combination which maximises Sally's utility, given her budget constraint. (d) Calculate the impact on Sally's optimum market basket of an increase in the price of X to $15. What will happen to her utility as a result of the price increase?