Factors decrease significantly for period t+1.

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Answer 1

Question

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

b)

To determine

To know:

Reason for the pattern of discount rates.

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

d)

To determine

To ascertain:

Reason for constraints.

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

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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…

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You were presented with a utility maximizing rule which states: If you always choose the item with the greatest marginal utility per dollar spent, when your budget is exhausted, the utility maximizing choice should occur where the marginal utility per dollar spent is the same for both goods. That rule is expressed as follows: Group of answer choices (The marginal utility associated with good 1 / the price of good 2) = (the marginal utility associated with good 2 / the price of good 1) % change in price / % change in quantity (The marginal utility associated with good 1 / the price of good 1) = (the marginal utility associated with good 2 / the price of good 2) The marginal utility per dollar of good 1 > the marginal utility per dollar of good 2.

Answer 2

Question

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

b)

To determine

To know:

Reason for the pattern of discount rates.

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

d)

To determine

To ascertain:

Reason for constraints.

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

b)

To determine

To know:

Reason for the pattern of discount rates.

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

d)

To determine

To ascertain:

Reason for constraints.

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Expert Solution & Answer

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Answer 4

Question

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

b)

To determine

To know:

Reason for the pattern of discount rates.

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

d)

To determine

To ascertain:

Reason for constraints.

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Expert Solution & Answer

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Answer 5

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

b)

To determine

To know:

Reason for the pattern of discount rates.

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

d)

To determine

To ascertain:

Reason for constraints.

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Answer 6

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

Answer 7

Chapter 17, Problem 17.13P

a)

To determine

To find:

Factors decrease significantly for period t+1.

Answer 8

b)

To determine

To know:

Reason for the pattern of discount rates.

Answer 9

b)

To determine

To know:

Reason for the pattern of discount rates.

Answer 10

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

Answer 11

c)

To determine

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

Answer 12

d)

To determine

To ascertain:

Reason for constraints.

Answer 13

d)

To determine

To ascertain:

Reason for constraints.

Answer 14

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Answer 15

e)

To determine

To ascertain:

Ways in which people have constraints in their life.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 17 - Prob. 17.1P Ch. 17 - Prob. 17.2P Ch. 17 - Prob. 17.3P Ch. 17 - Prob. 17.4P Ch. 17 - Prob. 17.5P Ch. 17 - Prob. 17.6P Ch. 17 - Prob. 17.7P Ch. 17 - Prob. 17.8P Ch. 17 - Precautionary saving and prudence The Query to...Ch. 17 - Wonopoly and natural resource prices Suppose that...

Factors decrease significantly for period t+1.

Solution Summary: The author explains that changes in exogeneous variables must be considered for profit maximizing equations.

To find:

Factors decrease significantly for period t+1.

To know:

Reason for the pattern of discount rates.

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

To ascertain:

Reason for constraints.

To ascertain:

Ways in which people have constraints in their life.

Want to see the full answer?

Chapter 17 Solutions

Factors decrease significantly for period t+1.

Solution Summary: The author explains that changes in exogeneous variables must be considered for profit maximizing equations.

To find: Factors decrease significantly for period t+1.

To know: Reason for the pattern of discount rates.

To ascertain: Relation between optimal consumption in period t+1 and t+2.

To ascertain: Reason for constraints.

To ascertain: Ways in which people have constraints in their life.

Want to see the full answer?

Chapter 17 Solutions

To find:

Factors decrease significantly for period t+1.

To know:

Reason for the pattern of discount rates.

To ascertain:

Relation between optimal consumption in period t+1 and t+2.

To ascertain:

Reason for constraints.

To ascertain:

Ways in which people have constraints in their life.