The following questions are independent of each other:Samir consumes apples and bananas and is in consumer equilibrium.The marginal utility from his last apple is 81 and the marginal utility from his last banana is 27.If the price of an apple is $0.90, then the price of a banana is $As one moves up a typical indifference curve, how does the marginal rate of substitution change?ItThe marginal rate of substitution of X for Y is 5, the price of X is $4, and the price of Y is $7.A utility-maximizing consumer should chooseX andY.The first can of Coke gives 26 units of utility to Witney, while the second can of Coke increases her total utility to 38.The marginal utility of the second can of Coke isunits.

StepsApproach to solving the question:Explanation:Since the marginal utility of an apple is higher…

Answered: The following questions are independent…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose an individual is currently spending all of their income on a bundle of books and pizza, but they are not sure whether the bundle maximizes their utility. Assume the individual has a strictly diminishing marginal rate of substitution over these two goods. At their current bundle of books and pizza, the individual's marginal utility from consuming books is 6 utils and their marginal utility from consuming pizza is 3 utils. If the current price of a book is $12 and the price of a pizza is $7, which of the following statements must be true: A. The individual can increase their utility by consuming more books and less pizza B. The individual is maximizing their utility C. The individual can increase their utility by consuming more pizza and fewer books
Tristan has preferences for computers (C), and robots (R). Computers costs $750 a unit and robots costs $2000 a unit. Tristan has $15000 to spend on both goods. Give the equation for Tristan’s budget line. If robots are on the vertical axis, what is the slope of the budget line? Tristan is a utility maximizer. Describe the utility maximization condition. Using the available information at what value is utility expected to be maximized. It is known that the indifference curve is convex. What does this tell you about the relationship between the goods?
Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $
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John has a utility function for chocolates (x) and candy (y) which is represented by u(x,y)=xy. Suppose that his income is 1000 TL and the prices of the goods are Px=10 TL and Py =5 TL. Now suppose that the price of chocolate decreases to Px=8 TL. Find the substitution effect and income effect, on chocolate, of this price change.
What happens to utility when we move up and down on the indifference curve? What happens to utility when we move up across the indifference map?
Yam has the following utility function for Apples (X1) and Ice Cream (X2), U(X1,X2) = Min{3X1,X2}. Yam likes to get more of both Apples and Ice Cream. Suppose Yam has an income of M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on Ice Cream. Yam's after tax optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better…
Page of 3 > Due November 1, 2 Press Esc to exit full screen A. Jack enjoys a cup of cappuccino every morning, which is made with equal parts of steamed milk (m) and espresso(e). Suppose Jack's utility function U(m, e) = min(m, e). Graph Jack's indifference curves when U = 4 and U = 8. B. Leslie buys 2 goods: z and y. His utility function is U(z,y) = 5x+3y. 1. Plot this consumer's indifference curves when U = 15 and U = 20. What is the shape of Leslie's indifference curves? 3. For Leslie, how are these two goods related? C. Leslie's friend Tim has a different utility function for the same goods U(x, y) = √zy. 1. Plot this consumer's indifference curves when U = 15 and Ū = 20. 2. What is the shape of Tim's indifference curves? D. A consumer's utility function for goods 2 and y is U(z,y) = x+2y. 2. 1. Calculate the consumer's marginal utility for each good at (2,2) (Hint: marginal utility represents the amount of utility the consumer gains by consuming one more unit of this good. You can…
10 Jason has the following utility function: U = F2C where F is food and C is clothing. Clothing is measured on the vertical axis while food is measured on the horizontal one. Derive Jason's Marginal Rate of Substitution. Does his Marginal Rate of Substitution stay constant along one of his indifference curves? Explain your answer clearly
Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is €2 per pound, the price of oranges is €3 per pound, and Bob's budget is $24 per week. What is Bob's utility maximizing choice between these two goods? A. 12 pounds of apples and no oranges B. 8 pounds of oranges and no apples C. 4 pounds of oranges and 6 pounds of apples D. 12 pounds of oranges and no apples Fiona uses her entire budget to purchase food and clothing. The price of food is €1 per unit and the price of clothing is €2 per unit. Fiona's marginal utility from food is 2 and her marginal utility from clothing is 6. She currently spends all her money on food and clothing. Her objective is to maximise her utility. Which of the following statements is correct? Fiona should buy more food and more clothing. A. B. C. D. E. Fiona is currently maximsing her utility and should continue to consume her current…
In the theory of consumer behavior, what are the three basic assumptions about individual preferences? What is an indifference curve? What is the Marginal Rate of Substitution (MRS)?

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