The goal of a rational consumer is to maximize (Plus explanation) the MU/P of all goods...

The goal of a rational consumer is to maximize (Plus explanation)

the MU/P of all goods consumed.
the quantities of all goods consumed.
total utility from all goods consumed.
marginal utility of all goods consumed.

Expert Solution

Answer will be to maximize total utilities of all goods consumed. Because if consumer wants to maximize marginal utilities then he would stop when the marginal utility start reducing but that is not the cases. Consumer consumes untill the amount spend adds some utility When it stops giving more utility or reducing total utility then only customer stops.

ekkarill92 answered 2 years ago

Suppose the goal of a union is to maximize the total income of all workers it...

Suppose the goal of a union is to maximize the total income of all workers it represents. In this case it will probably aim for a wage at which the elasticity of demand for workers is a. 0. b. infinite. c. 1. d. ranging from 2 to 5.

The ultimate goal of all financial decisions is “to maximize the value of shareholders”. With your...

The ultimate goal of all financial decisions is “to maximize the value of shareholders”. With your knowledge in Strategic Finance Issues, how true is this statement and how can financial manager practically achieve the “shareholder value maximization goal” through the decisions they take? You may use the balance sheet model to explain.

1.List conditions for a market to be efficient? Hint: Maximize consumer surplus plus producer surplus equal...

1.List conditions for a market to be efficient? Hint: Maximize consumer surplus plus producer surplus equal total society surplus is maximized equal society is happier. Start your answer with this hint. 2. This data is very similar to the data in chapter 9, power point slide 9. Without trade, PD = $2,500, Q = 300 In world markets, PW = $1200 Under free trade, how many TVs will the country import or export? Identify consumer surplus (CS), producer surplus (PS),...

A consumer has demand for two different goods, x and y, which he chooses to maximize...

A consumer has demand for two different goods, x and y, which he chooses to maximize the utility function: U(x,y)=√x+√y (x≥0, y≥0) subject to the budget constraint: px+qy=m (m,p,q>0) where p is the price of good x, q is the price of good y, and m is total income a) Show that the utility function is concave b) Write out the Lagrangian for the constrained maximization problem, assuming consumer spends his full income c) Find the utility maximizing demands for...

1. All feasible bundles will maximize consumer utility: True False 2. The point to the right...

1. All feasible bundles will maximize consumer utility: True False 2. The point to the right of the budget constraint is infeasible. True False 3. For a budget constraint involving 2 goods, good X is on the x-axis and good Y on the y-axis. If the price of good X increases, A.the slope of the budget constraint becomes steeper and the x-intercept of the budget constraint slides in along the x-axis. B.the slope of the budget constraint becomes flatter and...

1. A) If the consumer is consuming exactly two goods, and she is always spending all...

1. A) If the consumer is consuming exactly two goods, and she is always spending all of her money, can both of them be inferior goods? B) Show that perfect substitutes are an example of homothetic preferences. C) Show that Cobb-Douglas preferences are homothetic preferences.

If a consumer spends all her income on two goods X and Y , then she...

If a consumer spends all her income on two goods X and Y , then she can just afford either consumption bundle (5, 10) or (10, 7.5). Write the equation of her budget line.

These are all True/False questions and require a concise explanation. Consider a consumer. We can monotonically...

These are all True/False questions and require a concise explanation. Consider a consumer. We can monotonically transform his utility function u, and his decisions will remain the same. Similarly, we can monotonically transform a firms production function and the firm’s input decisions will remain the same. Consider the cost minimization problem. Suppose that a firm's production requirement is doubled and its input prices are halved. The firm's total cost will say the same. Suppose that factor demands weren’t homogeneous of...

Suppose a consumer spends all her income on goods X and Y. Suppose the price of...

Suppose a consumer spends all her income on goods X and Y. Suppose the price of good X increases, and the consumer's income decreases. Which of the following must be true? The amounts of both good X and good Y that the consumer can purchase decrease. The amount of good Y that the consumer can purchase decreases. The amount of good X that the consumer can purchase decreases. The amount of good X that the consumer can purchase decreases, and...

A consumer allocates all of her income between two goods, food and clothing, with the quantity...

A consumer allocates all of her income between two goods, food and clothing, with the quantity of food consumed captured by the variable F while that of clothing by the variable C. The consumer has usual strictly convex preferences between the two goods. Assume that food is an inferior good and it is kept on the horizontal axis. Suppose that the consumer’s income remains unchanged but prices of both of these goods change. The price changes you need to examine...

Question