Question

In: Economics

Currently, consumers earn 2,000, the price of x-jae is 50 and the price of y-jae is...

Currently, consumers earn 2,000, the price of x-jae is 50 and the price of y-jae is 80. utility function u=1/2xy
(1) Get a Budget Set
(2) Seek a Consumer Balance Point
(3) What is the price effect if the price of x material falls to 20? And what are the income effects and the magnitude of the alternative effects respectively (take into account the magnitude of the utility represented by the indiscriminate curve)?

Solutions

Expert Solution

Dear Student/ Learner, it was my great pleasure to help you solving this problem. I wish you best luck for your learning endeavour.
Happy Learning

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

A stock price is currently $50. A stock price is currently $50. Over each of the...
A stock price is currently $50. A stock price is currently $50. Over each of the next two three-month periods it is expected to go up by 6% or down by 5%. The risk-free interest rate is 5% per annum with continuous compounding. Use two-period binomial models to value the six-month options on this stock. Remember to show detailed calculations of the option value at each node. (a) What is the value of a six-month European call option with a...
Suppose there are two consumers, A and B, and two goods, X and Y. The consumers...
Suppose there are two consumers, A and B, and two goods, X and Y. The consumers have the following initial endowments and utility functions: W X A = 2 W Y A = 9 U A ( X , Y ) = X 1 3 Y 2 3 W X B = 6 W Y B = 2 U B ( X , Y ) = 3 X + 4 Y Suppose the price of X is PX=2 and the...
Suppose that there are two consumers A and B and two products x and y. The...
Suppose that there are two consumers A and B and two products x and y. The initial endowment W is such that consumer A is endowed with (WXA, WYA) = (1,8) and consumer B is endowed with (WXB, WXB) = (8,27). Both consumers have standard preferences, and their utility functions are the same and equal to UA(xA, yA) = xA * yA2 UB(xB, yB) = xB * yB2. Question 1 -a Determine consumer A and B’s utility at their initial...
Calculate E(rxy) for (50%X + 50%Y) portfolio E(rxz) for (50%X + 50%Z) portfolio from the following...
Calculate E(rxy) for (50%X + 50%Y) portfolio E(rxz) for (50%X + 50%Z) portfolio from the following data:                                                             E(rxy)                 E(rxz)                                                                                       (50%X + 50%Y)      (50%X + 50%Z) Yr (t)                  E(rx) E(ry) E(rz)         2012                 8.0    24.0 8.0                                       2013                   10.0 20.0 12.0                                    2014                   12.0 16.0 16.0                                    2015                   14.0 12.0 20.0                  2016                   16.0 8.0    24.0                  ...
Let X and Y have the following joint distribution: X/Y 0 1 2 0 5/50 8/50...
Let X and Y have the following joint distribution: X/Y 0 1 2 0 5/50 8/50 1/50 2 10/50 1/50 5/50 4 10/50 10/50 0 Further, suppose σx = √(1664/625), σy = √(3111/2500) a) Find Cov(X,Y) b) Find p(X,Y) c) Find Cov(1-X, 10+Y) d) p(1-X, 10+Y), Hint: use c and find Var[1-X], Var[10+Y]
An economy produces 10,000 computers valued at $2,000 each. Of these, 2,000 are sold to consumers,...
An economy produces 10,000 computers valued at $2,000 each. Of these, 2,000 are sold to consumers, 3,000 are sold to businesses, 3,000 are sold to the government, and 1,000 are sold abroad. No computers are imported. The unsold computers at the end of the year are held in inventory by the computer manufacturers. Please enter your answers as numeric responses with no decimal places. (ie. 4,000,000 or $4,000,000 not "Four million dollars") Also because these answers will be large numbers...
You consume two goods, X and Y . On Tuesday, the price of Y (not X!!)...
You consume two goods, X and Y . On Tuesday, the price of Y (not X!!) rises. On Wednesday, there are no new price changes, but your income rises until you are just as happy as you were on Monday. a) Draw your budget lines and optimum points on all three days. Label the optima M, T and W. b) In terms of the locations of the optimum points, what would it mean for Y to be a Giffen good?...
​D(x) is the​ price, in dollars per​ unit, that consumers are willing to pay for x...
​D(x) is the​ price, in dollars per​ unit, that consumers are willing to pay for x units of an​ item, and​ S(x) is the​ price, in dollars per​ unit, that producers are willing to accept for x units. Find ​(a​) the equilibrium​ point, ​(b​) the consumer surplus at the equilibrium​ point, and ​(c​) the producer surplus at the equilibrium point. ​D(x)=(x-8)^2​, ​S(x)=x^2+4x+24
​D(x) is the​ price, in dollars per​ unit, that consumers are willing to pay for x...
​D(x) is the​ price, in dollars per​ unit, that consumers are willing to pay for x units of an​ item, and​ S(x) is the​ price, in dollars per​ unit, that producers are willing to accept for x units. Find ​(a​) the equilibrium​ point, ​(b​) the consumer surplus at the equilibrium​ point, and ​(c​) the producer surplus at the equilibrium point. D(x)=(x-5)^2 S(x)=x^2+4x+11
D(x) is the price, in dollars per unit, that consumers are willing to pay for x...
D(x) is the price, in dollars per unit, that consumers are willing to pay for x units of an item, and S(x) is the price, in dollars per unit, that producers are willing to accept for x units. Find (a) the equilibrium point (b) the consumer surplus at the equilibrium point, and (c) the producer surplus at the equilibrium point. D(x)=-5/6x+11,S(x)=1/3x+4
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT