Which of the following combinations are unattainable given a consumer's budget line? Multiple choice question. A combination that intersects either of the axes Combinations that fall on the budget line Combinations that fall inside the budget line Combinations on the midpoint of the budget line Combinations that fall beyond the budget line
Q: A negative marginal utility implies that the consumer has reached a point of satiation.
A: Total utility, in economics, is defined as the total amount of satisfaction which a consumer…
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A: The additional pleasure or advantage that a consumer receives from consuming one more unit of an…
Q: Show how the budget constraint affects utility maximization.
A: Answer: Introduction: A consumer maximizes his/her utility by choosing the bundle of goods that…
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A: For a consumer the utility function for two goods, food (F) and clothing (C) is given as: U(F, C) =…
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A: Marginal utility is the utility derived by the consuming 1 additional unit of good.
Q: True/False Marginal utility is 0 for the Consumption of the very first unit.
A: the term marginal utility simply means the extra satisfaction which a consumer gets when he consumes…
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Q: True/False Marginal utility is 0 for the Consumption of the very first unit.
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Q: Utility equals satisfaction true or false
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Q: The marginal utility of the 8th can of beer is
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Q: Suppose a consumer has a budget of $200 to spend on two goods, X and Y, whose prices are $20 and…
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A: Answer to the question is as follows :
Q: Which of the following combinations are unattainable given a consumer's budget line? Multiple choice…
A: Budget line:It is a graphical representation of the combination of two sets. That is earning od…
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- The following five individuals have different utility functions over food (good x) and clothing (good y): 1) u₁(x, y) = 3x²y 2) u₂(x, y) = 2√x + y 3) Uz(x, y) = x0.6y0.4 4) u₁(x, y) = x² + y² 1 5) us(x, y) = x + 3y For each of these people: a) Compute their marginal utilities of good x, MUx = Ju(x,y) MU, = ду du(x,y) ax b) Check whether the property of "more is better" is satisfied for both goods? Explain. [Hint: Check whether marginal utilities are positive assuming positive amounts of good x and good y] ƏMUX əx and marginal utility of good y, c) Does the marginal utility of good x diminish, remain constant, or increase as each of the individuals buys more x? Explain. [Hint: There are 2 ways to do it: 1) visually check what happens to the expression of MUx when x increases (does it decrease, keep constant or decrease?); or 2) take the partial derivative of this marginal utility with respect to x, that is ƏMUx .aMUX ƏMUX If 0, the marginal utility of x is increasing in x] d) Does the…You have preferences u(x,y) = xy over games (X) and videos (Y) you can buy on a platform and a $360 budget, with prices px = 9 and py = 6. How much would you be willing to pay (at most) as a subscription fee for each of the following plans (you can buy any amount of Y in each plan at the original price, unless otherwise stated): (a) Plan A : You can buy (any amount of) X at a discounted price px = 4(b) Plan B : You are given 40 units of X for free, but you cannot buy any more of X. (surely can buy any amount of Y)(c) Plan C : You are given 30 units of X for free, but you cannot buy any more of X; you also have a discounted price for good Y; py = 4.You are in the market for a new couch and havefound two advertisements for the kind of couchyou want to buy. One seller notes in her ad that sheis selling because she is moving to a smaller apartment, and the couch won’t fit in the new space.The other seller says he is selling because the couchdoesn’t match his other furniture. Which seller doyou expect to buy from? Why? ( Hint: Think whowould be the more motivated seller.)
- Another instance when people are likely not to spend a dime (or a minute) on an item is when they have a dislike for mixing the item with other items available. In this case, we say the consumer has ‘non-convex preferences’ and indifference curves are bowed out from the origin. In plain language, the consumer has a preference for binging. We often feel this way towards our favorite social media app. Consider a kid who has four hours a day to spend on social media. They enjoy spending time on Snapchat (x) or spending time on Twitter (y). a) Write the kid’s time constraint and illustrate it in a graph where you measure time spent on Snapchat along the horizontal axis and time spent on Twitter along the vertical axis. This kid’s utility from time spent on Snapchat and time spent on Twitter is U(x,y) = 4x2+ y2. b) In your graph, draw a couple of the kid’s indifference curves. Notice how the kid’s |MRSY,X| increases along each curve as he spends more time on Snapchat and less time on…Problem 1 Last week, neither Alistair nor Bodana purchased blueberries (x). Both consumers had $30 to spend on blueberries and/or raspberries (y), the price of the two fruits was $3 per pack and both consumers bought raspberries only. Alistair's utility for blueberries and raspberries is UA(x,y) = x+2y. Bodana's utility for blueberries and raspberries is UB(x,y) = x +12ln(y). a) In two separate graphs, illustrate Alistair's and Bodana's optimal choices. Your graphs must illustrate the consumers' budget constraints and their indifference curves at the optimal bundle. b) At their optimal bundle, what is Alistair's marginal rate of substitution of raspberries for blueberries (- MUx/MUy)? At their optimal bundle, what is Bodana's marginal rate of substitution? This week, blueberries cost $3 per pack just like last week, however raspberries now cost $4 per pack. c) How many packs of blueberries and raspberries will Alistair buy this week? Clearly justify your answer. d) Using the…Kimberly has $1,000 per year to spend between $50 concert tickets and $200 per night getaways. Her utility maximizing combination is 8 concerts and 3 overnight getaways. She recently received a promotion on her job and now she can spend up to $2000 per year on these two items. Her new utility maximizing combination will depend in part on what? Group of answer choices The substitution effect. The income effect. The degree to which concerts and overnight getaways are normal goods or inferior goods. The fact that concerts and getaways are fungible goods.
- Refer to the graph below Quantity of Y 160 0 Multiple Choice The consumer's income is $1,000 Why doesn't the consumer choose the combination at point B O Quantity of X 200 O The marginal utility of Y exceeds the marginal uplity of X O The consumer is willing to give up more X for an additional unit of Y than must be given up given the relative prices of X and Y. The marginal utility per dollar spent on X exceeds the marginal utility per dollar spent on Y The consumer is willing to give up more Y for an additional unt of X than must be given up given the relative prices of X and YYou currently have (x, y) = (8, 2) and the utility function U(x, y) = min(x, 4y ). How many units of X are you willing to give up to get another unit of Y?Reese thinks peanut butter and chocolate are great when separate, but when they combine they are even more epic. In other words, Reese likes to eat either peanut butter or chocolate, but when he eats them together, he gets additional satisfaction from the combination. His preference over peanut butter (x) and chocolate (y) is represented by the utility function: u(x, y) = xy + x + y Which of the following is NOT true about Reese’s preference? (a) The MRS decreases when x increases.(b) The preferences are homothetic.(c) The marginal utility of y is higher when x = 10 than when x = 5.(d) For any a > 0, Reese prefers the bundle (x =a/2 , y = a/2 ) over either the bundle (x = a, y = 0) or (x = 0, y = a).
- Several local golf tournaments are coming up and Tommy needs to purchase golf balls in preparation. He has set a $150 budget and will choose golf balls that will give him as much utility as possible. A local sporting goods store sells a box of golf balls at a retail price of $30 and Tommy purchases 2 boxes. A few buddies tell Tommy about an online store that offers boxes of golf balls at a discounted price of $21, while all other prices remain the same, and Tommy decides to purchase 3 additional boxes of golf balls to keep on hand. Given this information, plot Tommy's demand curve for golf balls. Provide your answer below: Price of Golf Ball Boxes Online Store (4,$22) 20 Local Store (1,$10) —101 Quantity of Golf Ball BoxesOptimal consumption refers to Multiple Choice the mix of products that maximizes total utility for the limited amount of income consumers have to spend. the total number of products that maximizes total utility for consumers. the maximum total utility a consumer receives by the consumption of one more item. the amount demanded that will create the strongest economy.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…