Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 4.A, Problem 4E
(a)
To determine
Identify the shape of the indifference curve.
(b)
To determine
The quantities of X and Y.
(c)
To determine
The
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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
Carla has utility function U(x, y) = vx + 2y over goods x and y
a) Do we have a name for this type of utility function? Are Carla's preferences well-behaved?
b) Let Carla have budget I=$40, and let prices be Px=$2, Py=$8. What bundle will Carla consume?
c) What if Carla's budget drops to $20?
[Think about: could this utility function describe Carla's preferences over bread and ice cream?]
Joyce drinks both coffee (x) and tea (y). Her preferences over these two goods can be represented by the utility function U(x,y) =x + 3y^1/2 where x represents the number of pounds of coffee and y represents the number of cups of tea.
a) Given her preferences, find her demand functions for coffee (x) and tea (y).
b) Suppose that the price of a pound of coffee is $4 and that she has $56 to spend on coffee and tea. Write her demand curve for tea. Illustrate her demand curve.
c) Suppose that the price of a cup of tea is $1 (the price of coffee and income remain $4 and $56, resp.). Use your demand functions to find her best bundle. In an indifference curve diagram illustrate her best bundle at these prices. For the remainder of the question, assume that her income rises to $60 and that the prices of coffee and tea are unchanged at = $4 and =1.
Chapter 4 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 4.A - Prob. 1ECh. 4.A - Prob. 2ECh. 4.A - Prob. 3ECh. 4.A - Prob. 4ECh. 4.A - Prob. 5ECh. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQ
Ch. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQCh. 4 - Prob. 11RQCh. 4 - Prob. 12RQCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Judy has decided to allocate exactly 500 to...Ch. 4 - The ACME Corporation determines that at current...Ch. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16E
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