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The consumer's utility function is the following: U=x + 10x0,6 1 The consumer's optimal values of x and x are the given by the following: x 1 2 P 6P 2 +9 P P P 1 1 The compensated demand equations for x and x are the following: x₁=U-10 1 2 6P 0.6 P 2 1 2 1-0.6 1-0.6 x2c Assume the prices are the following: P₁=1, P₂=1, I=10000, and the P₁ that makes x=0 is P₁=16.732. 1 What is the consumer surplus? = - = 6P 1 P 2 6P 1 P 2 1-0.6 1-0.6

The consumer's utility function is the following: U=x + 10x0,6 1 The consumer's optimal values of x and x are the given by the following: x 1 2 P 6P 2 +9 P P P 1 1 The compensated demand equations for x and x are the following: x₁=U-10 1 2 6P 0.6 P 2 1 2 1-0.6 1-0.6 x2c Assume the prices are the following: P₁=1, P₂=1, I=10000, and the P₁ that makes x=0 is P₁=16.732. 1 What is the consumer surplus? = - = 6P 1 P 2 6P 1 P 2 1-0.6 1-0.6

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The consumer's utility function is the following: U=x + 10x0.6 2 The consumer's optimal values of x and x are the given by the following: x 1 I P 1 The compensated demand equations for x, and x are the following: x = U-10 1 2 le 6P P P P 1 2 6P P 1 2 0.6 1-0.6 1 1-0.6 x2c 2 1h Assume the prices are the following: P =1, P =1, I=10000, and the P, that makes x =0 is P =16.732. What is the consumer surplus? 6P P = 1 2 6P P 2 1-0.6 1-0.6
Transcribed Image Text:The consumer's utility function is the following: U=x + 10x0.6 2 The consumer's optimal values of x and x are the given by the following: x 1 I P 1 The compensated demand equations for x, and x are the following: x = U-10 1 2 le 6P P P P 1 2 6P P 1 2 0.6 1-0.6 1 1-0.6 x2c 2 1h Assume the prices are the following: P =1, P =1, I=10000, and the P, that makes x =0 is P =16.732. What is the consumer surplus? 6P P = 1 2 6P P 2 1-0.6 1-0.6
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