Two consumers, Owen and Sylvan have preferences over two goods, X (on the horizontal axis) and Y. Owen's utility function is U₂ (X, Y) = 12X + 3Y, while Sylvan's utility function is Us (X,Y)= 6X + 8Y, where X, Y > 0. Owen has £120 to spend, while Sylvan has £168 to spend. The market demand and supply functions for good X are: Qax = 500 - 7P; Qsx = 180 +9P. The market demand and supply functions for good Y are: Qay = 600 - 12P; Qsy = 120 +8P. Which of the following is correct? (a) Owen will purchase 6 units of good X and 0 units of good Y, while Sylvan will purchase 0 units of good X and 7 units of good Y. (b) Owen will purchase 0 units of good X and 5 units of good Y, while Sylvan will purchase 8.4 units of good X and 0 units of good Y.

Two consumers, Owen and Sylvan have preferences over two goods, X (on the horizontal axis) and Y. Owen's utility function is U₂ (X, Y) = 12X + 3Y, while Sylvan's utility function is Us (X,Y)= 6X + 8Y, where X, Y > 0. Owen has £120 to spend, while Sylvan has £168 to spend. The market demand and supply functions for good X are: Qax = 500 - 7P; Qsx = 180 +9P. The market demand and supply functions for good Y are: Qay = 600 - 12P; Qsy = 120 +8P. Which of the following is correct? (a) Owen will purchase 6 units of good X and 0 units of good Y, while Sylvan will purchase 0 units of good X and 7 units of good Y. (b) Owen will purchase 0 units of good X and 5 units of good Y, while Sylvan will purchase 8.4 units of good X and 0 units of good Y.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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