Suppose that you want to derive and draw the demand function for Mr. Seong (also known asPlayer 456). Mr. Seong likes to eat Dalgona Candy (D) and drink Soju (S). Suppose Mr. Seong'spreferences can be expressed as U(D,S) = (D)º.² · (S)0.8. Suppose further the price of aDalgona Candy is 2 (pº = 2) and the price of Soju is 4 (ps = 4). Mr. Seong has a budget of 100to spend on the two goods.A. Use the substitution method to find Mr. Seong's optimal choice of Dalgona Candy and Soju.B. Use any method to find Mr. Seong's optimal choice of Dalgona Candy and Soju if the priceof Soju was 5 (instead of 4). Feel free to use the Cobb-Douglas short-cut method if youwant.C. Use your answers to A and B to derive the demand for Soju in the two diagrams below. Thatis, draw the change in the top diagram and then use your result to derive the demand curvein the bottom diagram. Several hints have been drawn in the diagram below.D5010ps54202025SFYI: The Cobb-Douglas short-cut can be expressed as:X = apxYThat is, the demand for good X is a function of thepreference parameter (a), income, and the price of X.SFYI: To draw a demand curve we need tohold all factors that affect demand constant(such as income, preferences, and prices ofrelated goods). Then we change the price ofthe particular good (like Soju) and see howthe quantity demanded (of Soju) changes.Then plot the two (price, quantity)-combinations.There is a relationship between a diagramthat shows the constrained optimizationproblem (top diagram) and the demandcurve (bottom diagram)

Suppose that you want to derive and draw the demand function for Mr. Seong (also known as Player 456). Mr. Seong likes to eat Dalgona Candy (D) and drink Soju (S). Suppose Mr. Seong's preferences can be expressed as U (D, S) = (D)⁰.2. (S)0.8. Suppose further the price of a Dalgona Candy is 2 (p = 2) and the price of Soju is 4 (pS = 4). Mr. Seong has a budget of 100 to spend on the two goods. A. Use the substitution method to find Mr. Seong's optimal choice of Dalgona Candy and Soju. B. Use any method to find Mr. Seong's optimal choice of Dalgona Candy and Soju if the price

Suppose that you want to derive and draw the demand function for Mr. Seong (also known as Player 456). Mr. Seong likes to eat Dalgona Candy (D) and drink Soju (S). Suppose Mr. Seong's preferences can be expressed as U (D, S) = (D)⁰.2. (S)0.8. Suppose further the price of a Dalgona Candy is 2 (p = 2) and the price of Soju is 4 (pS = 4). Mr. Seong has a budget of 100 to spend on the two goods. A. Use the substitution method to find Mr. Seong's optimal choice of Dalgona Candy and Soju. B. Use any method to find Mr. Seong's optimal choice of Dalgona Candy and Soju if the price

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Subpart 4,5,6 only.
Consider a consumer with the utility function U (x1, x2 ) = 10x12/3x21/3 −50. Suppose the prices of x1 and x2 are 10 and 2 respectively and the consumer has an income of 150. How would the optimal bundle change if the utility function was log- linear: 2lnx1 +lnx2?
You go to the store in search of laundry detergent, to discover that they offer two varieties: Myst and Breez. Your preferences between Myst and Breez can be represented by the following utility function: U(M. B) = 16M + 32B Myst costs 4$ unit. Breez costs 10$ per unit for the first 5 units, but all units after 5 only costs $6. Find your Engel Curve for Breez.
(2) Lisa can buy either whole chickens or chicken wings at her local supermarket. Her utility function over whole chickens and chicken wings is U(xc,Xw) = 2xc + Xw, where x, and xw are chickens and chicken wings, respectively. What is her demand function xc (pc, Pw, m) for chickens?
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Q 15. suppose the consumer's utility function is given by U(x,y) =x^1/4 y^3/4 where the equation for this consumer's demand curve for x is?
Alonso has preferences for sport cars (C) and paella (P) given by the utility function U(C, P) = 4CP. The prices for C and P are, respectively, pc and pp. In what follows, do not worry if the results are not integers.
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