Which one of the following statements about preferences is true? O Quasilinear tastes can be defined, such that if (x₁, x2)> (1. y2), then (tx₁, x2) > (ty1, ty2) O Homothetic preferences have the same MRS on a ray from the origin, whereas quasilinear preferences have the same MRS on a vertical ray. O The MRS for perfect complements is 0 on the vertical part of the indifference curve, -∞ on the horizontal part of the indifference curve and undefined at the kink. then the consumer will optimize by consuming only good O If goods X and Y are perfect substitutes (with X measured on the horizontal axis) and the MRS MUX Px MUY Py O The Engel curve for a normal good will bend backwards, whereas the Engel curve for an inferior good will slope upwards. O No answer.

Which one of the following statements about preferences is true? O Quasilinear tastes can be defined, such that if (x₁, x2)> (1. y2), then (tx₁, x2) > (ty1, ty2) O Homothetic preferences have the same MRS on a ray from the origin, whereas quasilinear preferences have the same MRS on a vertical ray. O The MRS for perfect complements is 0 on the vertical part of the indifference curve, -∞ on the horizontal part of the indifference curve and undefined at the kink. then the consumer will optimize by consuming only good O If goods X and Y are perfect substitutes (with X measured on the horizontal axis) and the MRS MUX Px MUY Py O The Engel curve for a normal good will bend backwards, whereas the Engel curve for an inferior good will slope upwards. O No answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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18
Suppose that the following Cobb-Douglas utility function is given U(X,Y) = X³y/2, Which of the following is correct? O Law of diminishing Marginal Utility holds for good Y but not for good X while Law of Diminishing Marginal Rate of Substitution holds. Law of diminishing Marginal Utility holds for good X but not for good Y while Law of Diminishing Marginal Rate of Substitution holds. Law of diminishing Marginal Utility holds for good Y but not for good X while Law of Diminishing Marginal Rate of Substitution fails to hold. Law of diminishing Marginal Utility holds for both goods and Law of Diminishing Marginal Rate of Substitution holds as well
There are two goods, X and Y, available in arbitrary non-negative quan- tities (so the consumption set is R²). Beenish has preferences over consumption bundles that can be represented by a differentiable, strictly increasing and strictly quasi-concave utility function u R² → R+, given by u(x, y) = xªy¹-a where x is the quantity of good X, y is the quantity of good Y, and a € (0, 1) is a preference parameter. = 1. Suppose Beenish has 80 AED. In a nearby store (called "Store A"), the price of good X is p = 2 AED per unit of good X, and the price of good Y is q 8 AED per unit of good Y. However, Beenish also has a time constraint. At Store A, it takes tx 4 minutes per unit to purchase good X and ty 1 minutes per unit to purchase good Y. That means, purchasing a consumption bundle (x, y) = R² at Store A would take 4x + y minutes. Beenish has only 80 minutes to do her shopping. = (a) In an appropriate diagram, illustrate Beenish's constraint set, given that she has both a monetary…
- Assume an individual has quasilinear preferences of the form U(x1,x2) = 3x1¹2 + 2x2. If the price of Good 1 is $1 and the price of Good 2 is $2, how many additional units will the individual consume of Good 2 if her income increases by $1, assuming we're at an interior optimum? A. B. C. D. The individual's consumption of Good 2 will increase by 1/2 unit. The individual's consumption of Good 2 will increase by 1 unit. The individual's consumption of Good 2 will decrease. The individual's consumption of Good 2 will not change.
In the standard notation of our revealed preference analysis, suppose p^cC < p^CA < p^cB and p3cB < pBcC. Select one: Select one: a. These conditions are consistent with well-behaved preferences and imply only that situation A is revealed weakly preferred to situation C. b. These conditions are consistent with well-behaved preferences but tell us nothing about the preference ranking of the three situations. O c. These conditions are not mutually consistent with well- behaved preferences. O d. These conditions are consistent with well-behaved preferences and imply that situation C is revealed weakly preferred to situation B and situation A is revealed weakly preferred to situation C.
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Anya is currently consuming $1000 worth of consumption goods C and spending 30 hours in leisure I per week, where her marginal rate of substitution is 20. Assume that the price of a consumption good C is $1. This implies that she is willing to: O a. sacrifice 20 hours of leisure to get an extra $1 worth of consumption. O b. sacrifice $20 worth of consumption to enjoy the next hour of leisure. O c. her current utility will be higher by $20 if she gets one more unit of leisure. O d. she values the next unit of consumption at $20.
To determine the utility maximizing consumption of two products one uses the formula that is called the rule for maximizing utility: OP1/P2-MU1/MU2 which also is stated as MU1/PU1-MU2/P2.. OExplains the Diamond-Water Paradox. O Calculates the utility maximizing consumption of the two goods. All of the above are correct. None of the above are correct.
12 There are two goods and John's preferences can be represented by u: R²0 R given by u(x) = x₁³x2³. His income and price of the two goods are given by (M, P1, 20 P2) = (12, 1, 2). Which 2 of the following 8 options are false: In John's optimal bundle, he consumes the same amount of good 1 as good 2. If we change John's utility function to u(x) = x + then John's optimal bundle remains unchanged. At John's optimal bundle, the slope of the budget constraint equals the slope of the indifference curve. In John's optimal bundle, he spends the same amount on good 1 as good 2. John's preferences satisfy local non-satiation. At John's optimal bundle, his bang per buck of good 1 equals his bang per buck of good If we change John's utility function to u(x) = In (17 +x₁x₂) then John's optimal bundle remains unchanged. If we change the budget set to (M, P1, P2) = (24, 2, 4) then John's optimal bundle remains unchanged.
please only do: if you can teach explain steps of how to know of each cases? of the x
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Suppose the consumer's utility function is given by U(x,y) = X3/5y2/5, and the exogenous variables are given by M = 500, Px = 5, and Py = 4. Price of y changes to Py = 2. What is the income effect ony?O A.-14.53O B. +14.53O C. +24.21O D. +25.79O E. None of the above Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.