Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 4, Problem 4P
(a)
To determine
Derive the formula for Esteban’s family of indifference curve.
(b)
To determine
Derive the value of utility.
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Students have asked these similar questions
Your classmate tells you that he is indifferent between three soft drinks and two hamburgers or two soft drinks and three hamburgers
- Draw a rough diagram of an indifference curve containing your classmate’s consumption choices.
- Suppose that your classmate also states that he is indifferent two soft drinks and three hamburgers or one soft drink and four hamburgers, but that he prefers three soft drinks and two hamburgers to one soft drink and four hamburgers. Use your diagram from part (a) to reason out whether he can have these preferences.
There are two shows on Netflix that Jeff can watch, Show 1 and Show 2. Where x₁ measures the number of episodes watched of Show 1
and x2 measures the number of episodes watched of Show 2, Jeff's preferences can be represented by u(x₁, x₂) = x² + ax. Jeff has 8
hours available for watching Netflix today. Each episode of Show 1 lasts 30 minutes, while each episode of Show 2 lasts one hour.
Draw an indifference curve for Jeff, then answer the following questions. If rounding is needed, please round to 3 decimal places.
a) When a = 2, Jeff optimally watches_ episodes of Show 1..... (fill in the blank)
b)... and he watches episodes of Show 2. (fill in the blank)
c) When a = 6, Jeff optimally watches_ episodes of Show 1..... (fill in the blank)
d) ... and he watches. episodes of Show 2. (fill in the blank)
13. Shawn likes to consume pineapple smoothies and hotdogs. His preferences are
represented by the utility function U(x,y) = 34x - x²/2 + y where x is his consumption of
pineapple smoothies and y is his consumption of hotdogs. The price of pineapple
smoothies is $2 and the price of hotdogs is $1. If the price of pineapple smoothies
increases to $6, the change in Shawn's consumer surplus is:
A) -144
B) -128
C) -120
D) -112
E) -90
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