Suppose you have the following utility for bananas (b) and cars (c): U=max(b,c). Suppose the price of a banana is 2 liras and the price of a car is 100 liras. You have a 1000 liras. Please find the Walrasian demand for bananas and cars. Please show all your calculations.

Suppose you have the following utility for bananas (b) and cars (c): U=max(b,c). Suppose the price of a banana is 2 liras and the price of a car is 100 liras. You have a 1000 liras. Please find the Walrasian demand for bananas and cars. Please show all your calculations.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Mary can consume two goods X₁ and X2, where X₁ and X₂ are the quantities of two goods purchased.…

A: Mary's preferences are represented by the utility function: U(X1,X2)=X10.6X20.4Price of the good X1…

Q: Vera considered Chips and Salsa perfect complements. She had $24 to spend on chips and salsa and she…

A: The two goods here are perfect complements. Which means that the goods are consumed in fixed…

Q: Suppose Natasha consumes two goods: good 1 and good 2. Last year, the price of good 1 was $2.00 and…

A: Laspeyres Index is a consumer price index used to calculate the change in prices of a basket of…

Q: Complementary goods are goods that are closely related. Choose the example below that best describes…

A: The objective of the question is to identify the best example of complementary goods among the given…

Q: Consider the figure to the right, and suppose that the initial point is A. Explain why a decrease in…

A: Marginal utility refers to the additional satisfaction or usefulness that a consumer derives from…

Q: 1. Doug consumes two goods, electricity, e, and a composite commodity z. Doug has the following…

A: Utility function : U = z2 e Optimal point of consumption is achieved where the marginal rate of…

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

A: Total customers = 120,000 Price of other products = Pm= $1 Price of Vietnamese Meals = Pv The…

Q: Problem 1. Ted is an eight-year-old boy who loves Pokémon cards and Lego minifigures. His father…

A: Since you have posted multiple questions, we will provide the solution only to the first three…

Q: Use the Law of Diminishing Marginal Utility to discuss why Market Demand has to have a downward…

A: Utility is the satisfaction derive by consuming goods and services. And due to law of diminishing…

Q: Avery is currently using up the entire weekly budget she has allocated to purchasing Goods X and Y.…

A: Given Marginal utility on last unit of good X that Avery buy by using weekly income = 14 and last…

Q: Alex, who was convinced that "Football is coming home", was very excited for the World Cup last…

A: INTRODUCTIONIn the midst of World Cup excitement, Alex, a passionate football enthusiast, eagerly…

Q: Each week, Mary selects the quantity of two goods, X and Y, that she will consume in order to…

A: A budget constraint is a fundamental concept in economics that represents the limits or boundaries…

Q: The following table shows the amounts of additional satisfaction (marginal utility) that Ross would…

A: Utility is defined as the usefulness or the satisfaction a consumer derives from a good or service…

Q: Suppose Lucia has to choose between purchasing high-definition televisions and water. Which of the…

A: The process by which individuals or households allocate their limited resources (such as income or…

Q: Let's assume that Justin Trudeau, who lives in Ottawa, is purchasing corn (C) and dandelion (D) in…

A: The utility is maximum when both goods are purchased at equal marginal utility per dollar.

Q: Suppose you go to Trader Joe's to buy fruit for the week. You only like apples (A) and bananas (B)…

A: Preference is over apples and bananas.Income = $11Price of Apples = $1 Price of Bananas = 0.25 We…

Q: Suppose Craig considers oranges and grapefruits to be perfect substitutes. Craig is willing to trade…

A: A utility function is a measurable depiction of a person's preferences while consuming various goods…

Q: If the price of eggs were to double from $1 per egg to $2 per egg, Freddy would consume 6 fewer eggs…

A: Consumption is outlined because the use of products and services by a house. it's a part within the…

Q: Q1: Zainab has a weekly budget of $48, which she likes to spend on magazines and pies. A. If the…

A: The budget line is a graphical outline of all potential mixes of the two products that can be…

Q: Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys…

A: According to the question, Nick and Sofia, two students, are debating the differences between…

Q: Refer to the table below. If the subscription price for a sports app is $2 per week, the…

A: Given,The subscription price for a sports app Ps is $2 per week.The subscription price for a game…

Q: Question 1 (Choice). Emie has two cell phones and obtains positive utility from talking on both. His…

A: Budget constraints shows the relationship between the two goods, their prices and the income of…

Q: 10.6 For every two boxes of strawberries that she consumes, Millicent insists on having one pitcher…

A: The consumer takes 2 boxes of strawberries and 1 pitcher of cream.The utility function for the…

Q: Joyce drinks both coffee (x) and tea (y). Her preferences over these two goods can be represented by…

A: Utility function is the functional relationship between the utility earned from consumption of two…

Q: Consider the figures to the right. Suppose that the individual currently consumes 5 digital apps.…

A: Total utility is the measure of the overall satisfaction received from the consumption of the goods…

Q: A consumer has a budget set aside for entertainment during the year, and they spend the budget on…

A: An indifference curve shows various possible combinations of two commodities that gives an equal…

Q: The first graph presents the utility maximizing combinations of bread and brie that Hayden chooses…

A: Given: Price of bread=$1 per loaf The price of brie could either be: $4 or $6 per wheel

Q: Another instance when people are likely not to spend a dime (or a minute) on an item is when they…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Suppose that, by law, a person is required to consume a fixed amount of good X, say X0. Assuming X…

A: The objective of the question is to understand the impact of a law that mandates the consumption of…

Q: Suppose that U(f,c) = f + 8c^(1/2) is a utility function that describes Amelia’s preferences over…

A: Since you have posted multiple questions, we will answer the first two questions for you. if you…

Question

Suppose you have the following utility for bananas (b) and
cars (c): U=max(b,c). Suppose the price of a banana is 2 liras
and the price of a car is 100 liras. You have a 1000 liras. Please
find the Walrasian demand for bananas and cars. Please show all
your calculations.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some money…
In Philip's world, only two goods give him utility: economics books (B) and computer games (G). His monthly budget is $100, while a book costs $5 and a game costs $10.
Please answer fast
A consumer is choosing between magazines and books. His set of čonsumer optimums are shown on the graph to the right. 50 Consumer income allocated for these two goods is equal to $150. The price of magazines (P,) is equal to $5.00. 45- 40 How do these changes in the price of books affect the demand for magazines? 35 demand remains constant 30- We can consider books and magazines to be goods. 25- 20- 15- PCC substitute 10- 5- complementary 0- O 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 unrelated Books O étv 21 MacBook Air DII 80 F10 F11 F7 FB F9 F6 F4 F5 F3 F1 F2 * @ # $ 7 8 9 1 2 4 P T Y Q W J K S F く Z C V command oF option command O 回 .. - つエ B ** A.
Fang likes playing badminton with her friends. Her utility function for playing badminton every week is given by U(t) = 11t – 2t2, where t is measured in hours. They play on a badminton court, which they can rent per hour. Suppose the current price to play on the badminton court is £2.50 per hour. How many hours should Fang play if she wishes to maximise her utility? Explain what we mean by the principle of diminishing marginal utility. Does the principle apply in Fang’s case? Explain why. In a diagram with income in pound sterling on the horizontal axis and quantity on the vertical axis, show the relationship between Fang’s budget and the number of hours that would maximise her consumer surplus.
We have determined that Jenny's satisfaction from eating a Snickers bar is 30 utils, whereas Sarah's satisfaction from eating a Snickers bar is 15 utils. We also know that Jenny prefers Snickers bars over Milky Way bars. Which of the following statements can we say for sure are true? Drag the true statements to the box. Items (7 items) (Drag and drop into the appropriate area below) Jenny likes Snickers bars twice as much as Sarah does. Sarah likes Snickers bars more than Jenny likes Milky Way bars. Sarah likes Snickers bars more than Jenny does. Jenny likes Snickers bars more than Sarah does. Jenny's satisfaction from consuming a Milky Way bar must be less than 30 utils. There is not enough information to determine who likes Snickers bars the most. The price of the Snickers bar is needed in order to find out who likes it the most.
In Philip's world, only two goods give him utility: economics books (B) and computer games (G). His monthly budget is $100, while a book costs $5 and a game costs $10.