Wassilyovich wishes to spend all his weekly income of $10 on two goods x and y. Assume both goods are divisible. The price of each good is $1 per unit. Last Sunday he cut two coupons from the newspaper. One said "Buy one unit of y and get one free!" while the other said "Buy one unit of x and

Wassilyovich wishes to spend all his weekly income of $10 on two goods x and y. Assume both goods are divisible. The price of each good is $1 per unit. Last Sunday he cut two coupons from the newspaper. One said "Buy one unit of y and get one free!" while the other said "Buy one unit of x and

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

See similar textbooks

Related questions

Q: The diagram to the right shows a market in which a price floor has been imposed. Calculate the…

A: Price floor is government-imposed price control. It is the minimum price that can be charged for a…

Q: $ 15 7 0 Marginal Control Costs 50 150 Marginal Damages 250 Emissions (tons) 1 What is the benefit…

A: A negative externality occurs when an economic activity imposes a cost on a third party who is not…

Q: For each of the proposals, use the previous graph to determine the new number of laboratory aides…

A: An equilibrium wage rate is attained where the willingness to pay for the quantity of hiring labor…

Q: Discuss and compare the three explanations for the shape of the yield curve.

A: This can be defined as an abundance of valuable resources or possessions that hold economic or…

Q: The following table shows how the marginal benefit of a service varies for five consumers. Quantity…

A: The marginal benefit for the five consumers are provided…

Q: Number of Units 1 W|N 2 3 4 Total Utility 40 80 140 182 222

A: Utility refers to the happiness or satisfaction that an individual get from the consumption of a…

Q: Suppose Kittyville's full-employment GDP is $600 billion, and the current equilibrium GDP is $400…

A: Full employment GDP is the potential output that an economy will produce with efficient utilization…

Q: The market demand and supply functions for hotel rooms in the City of Montreal areestimated as…

A: The demand curve shows an inverse relationship between price and quantity demanded. Demand is a…

Q: Use the data in the table to answer the question. Pineapples Coconuts Price 2 5 2016 Nominal GDP…

A: Nominal GDP, or Gross Domestic product, refers to the total market value of all final goods and…

Q: Explain how each of the factors would or would not affect the price elasticity of demand for a good…

A: The main pressing concern is to comprehend what the different elements mean for the price elasticity…

Q: ▼ Cash Flow Present Discounted Value Interest Rate is based on the notion that a dollar paid…

A: The objective of the question is to calculate the present value of a loan that is to be paid in the…

Q: What is meant by The Wealth Effect? a) As prices for outputs rise, it will be necessary for people…

A: The Wealth Effect is an economic concept that refers to the impact of changes in the overall price…

Q: Consider two-sided, one-to-one matching between five men (A, B, C, D, and E) and five women (1, 2,…

A: A blocking pair occurs when two individuals prefer each other over their current match.

Q: Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves…

A: Market equilibrium(E) is the point where the quantity(Q) of services or items supplied equals the…

Q: Suppose the government imposes a quota on imports of foreign-made steel. Assume that the quota has…

A: The objective of the question is to understand the impact of a government-imposed quota on the…

Q: 30 20 10 0 0 URE 6-1 1 2 3 Unit of a Good 4 5 6 er to Figure 6-1. The marginal utility of the second…

A: Utility is a want satisfying power of a good or service.Marginal utility measures the change in…

Q: Panther Airlines (PA) is the only airline that flies several routes. They have a potential…

A: Game theory is a concept that was developed by mathematicians and economists collectively. Game…

Q: Calculate the opportunity cost as the country moves from point A to B, B to C, C to D, D to E and E…

A: A production potential frontier (PPF) is a graphic representation of the highest possible output…

Q: Consider golfers who led the PGA in winnings in different years. Note that the winnings are in the…

A: Adjusted earnings refer to the income or earnings of a person or entity that have been changed or…

Q: Blank trade group The major economies in the ________ are China, South Korea, Japan, and Australia.

A: The allocation of resources to maximize the welfare of the economy is known as economics It also…

Q: Suppose a monopoly operates two shops along a one-mile street of 3,000 consumers, has marginal cost…

A: The difference between revenue which is the proceeds from sales and cost which is the expenses…

Q: 4. An economy has the Cobb-Douglas Production Function: Y = 10K¹/2 L¹/2 It has a savings rate of…

A: The Cobb-Douglas creation capability is a generally involved model in financial matters that…

Q: Economics Explain why a monopoly producer of shoes will not vertically integrate with perfect…

A: Vertical integration is the business strategy used to control the supply chain of the business. It…

Q: Taylor's marginal utility from watching movies and from eating out (in utils) is shown in the…

A: This theory explains how consumers choose various options to maximize their utility(U) given their…

Q: 2. Cynthia has preferences represented by the utility function u(x) = x² + x2 (a) Calculate…

A: A utility function is a mathematical representation of a consumer's preferences over different…

Q: Sometimes economies or firms produce inefficiently, which is represented by a point in the…

A: The objective of the question is to identify the term that describes a point on the production…

Q: Refer to the graph above illustrating supply and demand in a market. Suppose that the current price…

A: Demand curve is the curve that represents the willingness to pay for a good or service by a consumer…

Q: The figure to the right illustrates the demand for taxi rides in a large city. Suppose the price per…

A: Price elasticity of demand measures the responsiveness of change in quantity demand to change in…

Q: Given the following utility functions for Consumer A and Consumer B and their budget contraints: UA…

A: There are two individuals : A & B Utility function of A : Ua = X0.5Y0.5Utility function of B…

Q: Which of the following statements is false? Question 7Answer a. If the United States imposes a…

A: The objective of the question is to identify the false statement among the given options related to…

Q: 11) Which of the following is NOT a difficulty with using a piece-rate contract? A) measuring…

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

Q: equilibrium

A: Equilibrium condition: Firms earn zero profit at equilibrium.1. Individual firm's problem:Firm…

Q: Suppose the minimum wage in this economy is $8.70 per hour. An unemployed worker is defined as…

A: In a labor market, minimum wage refers to the situation when government sets a specific wage that a…

Q: The slope of the AS -curve becomes steeper: A) as the economy approaches full employment B)as…

A: The issue includes grasping the circumstances under which the slant of the Aggregate Supply (AS)…

Q: aaaaas An operation manager at an electronics company wants to test their amplifiers. The design…

A: The objective of this question is to find the probability that the mean amplifier output would be…

Q: Pollution from bright city lights makes it nearly impossible to stargaze within a city setting. The…

A: A Pigouvian tax is a form of tax levied on goods and services that generate negative externalities.…

Q: If government officials are mainly interested in generating tax revenue, then they should tax goods…

A: The objective of the question is to understand the relationship between price elasticity of demand…

Q: 1. (i) A utility function has the form U(w) = aw³ +bw2 where a, b E R. Assuming w > 0 and a 0, is…

A: The utility function is given as It is assumed that

Q: 2. A consumer has a utility function u(x, y) = xy⁰.5. (a) What is her demanded bundle under the…

A: A utility function is a mathematical representation of a consumer's preferences over different…

Q: Annie owns a florist and operates in a perfectly competitive market. Suppose that price per unit is…

A: The market is characterised by a huge number of sellers and buyers with homogeneous products. The…

Q: The table below gives information on the short-run relationship between the units of labor and…

A: Total Product(TP) is the overall output produced by all units of a production factor such as…

Q: Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)…

A: Average total cost (ATC) is a measure used in economics and business to determine the average cost…

Q: The table shows the market for house painters in New Mexico. a. If New Mexico introduces a strictly…

A: The labor(L) market refers to the interaction between employers and employees. Wages(W), or the…

Q: Uber, an online peer-to-peer ride-sharing service company, has figured out a way to lower the…

A: Here we have to find out the impact of Uber on Production Possibility Curve..Production Possibility…

Q: Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output…

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

Q: Sophia incorporated a company last year by investing an amount of $5 Million. For the expansion of…

A: Bonds are debt securities issued by corporations, governments, or other organizations to raise…

Q: Cañital stick for a country is $1600 billuon at the beginning of the year. Gross investment year is…

A: The objective of the question is to calculate the capital stock at the end of the year. The capital…

Q: Typed plz and asap wrong answer not accepted provide a quality solution if I get wrong answer I will…

A: The objective of the question is to find the profit-maximizing monopoly price and output given the…

Q: Question 1- If the seller has the constitutional burden, then A.the supply curve is shifted to…

A: The government only has the authority to impose taxes. Tax is the mandatory payment that is paid by…

Q: Suppose that real interest rates decrease across Europe. This development will funds to U.S. net…

A: Net Capital Outflow:Net Capital Outflow refers to the net flow of capital from one country to…

Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

Wassilyovich wishes to spend all his weekly income of $10 on two goods x
and y. Assume both goods are divisible. The price of each good is $1 per
unit. Last Sunday he cut two coupons from the newspaper. One said "Buy
one unit of y and get one free!" while the other said "Buy one unit of x and
get one free!' Each coupon is good for the purchase of one unit of the
respective good only. Draw Wassilyovich's budget constraint.

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: Describe the problem

VIEW

Step 2: Derive the budget constraint

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

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

The following graph shows Hilary's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line From the previous graph, you can tell that Hilary is willing to pay $_______ for her 8th slice of cheesecake each week. Because she has to pay only$3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $_______. Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Hilary would receive a consumer surplus of $_______.from the 8th slice of cheesecake she buys.The following graph shows the weekly market demand for cheesecake in a small economy. Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the…
For normal goodsA) the substitution effect of a price decrease will decrease the quantity of the good demanded while theincome effect of a price decrease will increase the quantity of the good demanded.B) the substitution and income effects of a price decrease will both increase the quantity of the gooddemanded.C) the substitution and income effects of a price decrease will both decrease the quantity of the gooddemanded.D) the substitution effect of a price decrease will increase the quantity of the good demanded while theincome effect of a price decrease will decrease the quantity of the good demanded.
If we have money, we buy goods and services to satisfy our needs. In economics, thesatisfaction that we get from the consumption of goods and services is called utility. Usea utility graph to explain what happen to the utility when you keep on increasing thenumber of units consumed. Also explain what happens to the utility when you keep onincreasing the number of units consumed. Also explain what happens to the additionalutility (i.e. additional satisfaction) when you increase your consumption by one unit
Angela and Vanessa are two friend who always eat ice cream together. The regular price of ice cream is $1 per spoon. Angela always orders 3 spoons and Vanessa orders 5 spoons. Every Tuesday, the ice cream is 50% off. Angela orders 6 spoons and Vanessa order 7 spoons on Tuesday. Which of the following statement is incorrect? O The total quantity of ice cream demanded by Angela and Vanessa increased by 5 on every Tuesday. O Angela's individual demand curve has a downward sloping. O The promotion on every Tuesday shift out the demand curve. O Vanessa's individual demand curve isn't same as Angela's.
Ari intends to purchase a new car and has narrowed it down to a Dodge Ram truck or a Toyota Camry. A Dodge Ram truck costs $55000 while a Toyota Camry costs $20000. The utility that Ari will get from Dodge Ram truck is 12500 while Toyota Camry will generate a utility of 2500. Note: A purchase generating utility tells us the marginal utility of the good. What is the Marginal Utility per Dollar for Dodge Ram truck? What is the Marginal Utility per Dollar for Toyota Camry? Will Ari be better off buying a Dodge Ram truck or a Toyota Camry? ODodge Ram truck OToyota Camry A
Good Y 20 Each week, Mary Selects the quantity of two goods, X and Y that she will consume in order to maximize her utility. She spends her entire weekly income on these two goods. Suppose you are given the following information about a three-week period, the choices that Mary makes over Where Px is the price of good X, Py is the price of good Y, and I is income: Week 1 Week 2 مل ۳۰ رم Week 3 is 7 Hi▬▬▬▬t da. X 10 6 14 Px $1 $1 8 $1 Y GOOD 3 6 9 12 15 17 21 24 21 10 ९1 1) using the line drawing tool, graph Mary's budget line for each week. Label the line L₁, L₂, and 13. + $1 2) Using the point drawing tool, indicate Mary's utility-maximizing bundle for each week. Label these points A, B.C. 30 $2 $2 I 20 20 38
Anatoly's marginal utility for DVDS (D) is MU X and his marginal utility for Xbox games (X) is MUx D. Anatoly's income is $120, the price of a DVD is $20.00, and the price of an Xbox game is $10.00. How many DVDS and Xbox games does Anatoly consume to maximize his satisfaction? Anatoly consumesDVDs andXbox games. (Enter your responses using integers.)
Consider the consumer only consumes two goods namely flour and potatoes. Potatoes are aninferior good. Do you think that flour can also be inferior goods? Give your reviews. If the priceof flour falls, illustrate the impact on the consumption of flour and potatoes using substitutioneffect and income effect.
Good Y 40 30 0 L L1 L2 8* e₁ ./1 12 60 Good X I The arrow on the graph above shows the budget line movement from L¹ to L² resulting from a price change. Identify (using the reference tangency points) the substitution effect of the price change. Explain in words the difference between the substitution effect and income effect. Which distances between the points (e₁,e₂, and e') show the income and substitution effects?
The table below shows total utility for two products. Suppose that the price for product A is $5 and the price for product B is $5. Number of product A Total Utility for A Number of product B Total Utility for B 0 0 0 0 1 140 1 180 2 260 2 340 3 360 3 460 4 440 4 520 5 500 5 540 Given this data, complete the table below: Quantity of A Marginal Utility for A Marginal Utility for A per dollar Quantity of B Marginal Utility for B Marginal Utility for B per dollar 0 0 1 1 2 2 3 3 4 4 5 5
. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases. Quantity Price per Download MU per download Music downloads 3 $3 60 Video downloads 2 $3 45 As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. Her available budget was $19.00. Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Total Money Total Budget music mu mu/$ music videos mu mu/$ videos Spent Remaining 1st ? ?…
The following table shows Madison's utility from consuming popcorn and Coke. Suppose that Madison has income of $9.00, the price of popcorn is $3.00, and the price of Coke is $0.75. If Madison wants to maximize her utility, how much popcorn and Coke should she buy? Рорсorn Marginal Utility 192 Coke Quantity Marginal Utility 1 144 144 108 3 96 72 4 48 36 24 18 6. 12 Madison should buy boxes of popcorn and cans of Coke. (Enter your responses as integers.)