Question
In: Economics
(a) If your utility is represented by u(x,y) = min(x+2y,2x+y);what do you indifference curves look like?...
(a) If your utility is represented by u(x,y) = min(x+2y,2x+y);what do you indifference curves look like?
(b) Given your answer in (a), obtain the MRS (marginal rates of substitution).
(c) Suppose the prices of x and y are px = $3 and py = $1 and you have 100 dollars. What would you choose?
(d) If px decreases to $1; what would you choose?
(e) Use the Slutsky decomposition to decompose the total price effect into the substitution effect and income effect when px decreases from $3 to $1
Solutions
Rahul Sunny answered 6 months agoRelated Solutions
(a) If your utility is represented by u(x; y) = min(x+2y; 2x+y);what do your indi¤erence curves...
(a) If your utility is represented by u(x; y) = min(x+2y;
2x+y);what
do your indi¤erence curves look like?
(b) Given your answer in (a), obtain the MRS (marginal rates of
sub-
stitution).
(c) Suppose the prices of x and y are px = $3 and px = $1 and
you
have 100 dollars. What would you choose?
(d) If px decreases to $1; what would you choose?
(e) Use the Slutsky decomposition to decompose the total price
e¤ect
into the...
(a) If your utility is represented by u(x; y) = min(x+2y; 2x+y);what do your indi¤erence curves...
(a) If your utility is represented by u(x; y) = min(x+2y;
2x+y);what do your indi¤erence curves look like?
(b) Given your answer in (a), obtain the MRS (marginal rates of
sub- stitution).
(c) Suppose the prices of x and y are px = $3 and px = $1 and
you have 100 dollars. What would you choose?
(d) If px decreases to $1; what would you choose? (e) Use the
Slutsky decomposition to decompose the total price e¤ect into the...
Amy has the utility function U=min(2x+y, x+2y) for goods x and y. 1) Draw the indifference...
Amy has the utility function U=min(2x+y, x+2y) for goods x and
y.
1) Draw the indifference curves where U=6 and U=12.
2) Draw Amy's typical demand curve for good x.
sketch two indifference curves for people with each of the following utility function U(x,y) = min...
sketch two indifference curves for people with each of the
following utility function U(x,y) = min {x+2y,3y}
Ella’s preferences can be represented by the utility function u(x,y) = min{5x, y}. If the price...
Ella’s preferences can be represented by the utility
function u(x,y) = min{5x, y}. If the price of x is
$10 and the price of y is $15, how much money would she need
to be able to purchase a bundle that she likes as well as the
bundle (10, 25).
Select one:
a. $475.
b. $85.
c. $425.
d. $209.
e. $440.
What do indifference curves look like for preferences exhibiting satiation?
What do indifference curves look like for preferences
exhibiting satiation?
Brianna’s preferences can be represented by the utility function u(x,y) = min{x,y}. Initially she faces prices...
Brianna’s preferences can be
represented by the utility function u(x,y) = min{x,y}.
Initially she faces prices ($2,$1) and her income is $12. If prices
change to ($3,$1) then the compensating variation
Select one:
a. There is not enough information to
determine which variation is greater.
b. is $2 more than the equivalent
variation.
c. is $1 less than the equivalent
variation.
d. equals the equivalent variation.
e. is $1 more than the equivalent
variation.
A consumer has his preferences represented by the utility function U(x,y) = min {5x + 4y,...
A consumer has his preferences represented by the utility
function U(x,y) = min {5x + 4y, 4x + 7y} if x is on the horizontal
axis and y is on the vertical axis, what is the slope of his
indifference curve at the point (10,10)
a. -4/7
b. -5/4
c. -4/5
d. -7/4
e. -5/7
Let the Utility Function be U=min { 2X , Y }. Find the compensated demands for...
Let
the Utility Function be U=min { 2X , Y }. Find the compensated
demands for X and Y by solving the Expenditure Minimization
Problem.
13. In terms of indifference curves, an increase in total utility is represented by a: A....
13. In terms of indifference curves, an increase in total
utility is represented by a:
A.
movement upward along an indifference curve.
B.
shift to the left to a lower indifference curve.
C.
movement downward along an indifference curve.
D.
shift to the right to a higher indifference curve.
14. A consumer has a budget of $60 and wishes to purchase both
products A and B. The price of product A
is $8.42, while the price of product B is...
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