An individual utility function is given by U(x,y) = x·y1/2. This individual demand equation for x...

An individual utility function is given by U(x,y) = x·y^1/2. This individual demand equation for x is a factor a of I/p_x: x* = a (I/p_x). In this specific case, factor a is equal to ______. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed.)

Expert Solution

Rahul Sunny answered 2 years ago

Given the utility function U ( X , Y ) = X 1 3 Y 2...

Given the utility function U ( X , Y ) = X 1 3 Y 2 3, find the absolute value of the MRS when X=10 and Y=24. Round your answer to 4 decimal places.

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y...

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y − 3.5)^2 Further assume that the price of good x, px = $6, the price of good y, py = $8, and the individual has an income m = $65 a) Draw an indifference curve (one IC is enough) that represents this person’s preferences. Please label the graph properly including values for x and y. b) Intuitively, and without formally solving, can you guess...

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y...

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y − 3.5)^2 Further assume that the price of good x, px = $6, the price of good y, py = $8, and the individual has an income m = $65 a) Draw an indifference curve (one IC is enough) that represents this person’s preferences. Please label the graph properly including values for x and y. b) Intuitively, and without formally solving, can you guess...

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y...

Suppose an individual has the following utility function: U(x, y) = −4(x − 5.5)^2 − 2(y − 3.5)^2 Further assume that the price of good x, px = $6, the price of good y, py = $8, and the individual has an income m = $65 a) Draw an indifference curve (one IC is enough) that represents this person’s preferences. Please label the graph properly including values for x and y. b) Intuitively, and without formally solving, can you guess...

Suppose your utility function is U(x,y) = 2ln(x)+4y a) Solve for the individual demand for good...

Suppose your utility function is U(x,y) = 2ln(x)+4y a) Solve for the individual demand for good x and the individual demand for good y. b) Given Px = 1, Py = 2, and M = 5, find the income elasticity of demand for good x -- is good x normal or inferior (or neither)? Also find the income elasticity of demand for good y -- is good y normal or inferior (or neither)? c) Given Px = 1, Py =...

Suppose your utility function is U(x,y)=2ln⁡(x)+4y. a) Solve for the individual demand for good x and...

Suppose your utility function is U(x,y)=2ln⁡(x)+4y. a) Solve for the individual demand for good x and the individual demand for good y. b) Given Px = 1, Py = 2, and M = 5, find the income elasticity of demand for good x -- is good x normal or inferior (or neither)? Also find the income elasticity of demand for good y -- is good y normal or inferior (or neither)? c) Given Px = 1, Py = 2, and...

Suppose a consumer's utility function is given by U ( X , Y ) = X...

Suppose a consumer's utility function is given by U ( X , Y ) = X 1 2 Y 1 2. The price of X is PX=8 and the price of Y is PY=5. The consumer has M=80 to spend. You may find that it helps to draw a graph to organize the information in this question. You may draw in the blank area on the front page of the assignment, but this graph will not be graded. a) (2...

Assume a Cobb-douglas utility function of 2 goods x and y given by U = x...

Assume a Cobb-douglas utility function of 2 goods x and y given by U = x 0.5y 0.5 and an initial income I of 100. Let initial price be px = 4 and py = 1. Now vary the price of x from 1 to 7 in steps of 1. So you have 7 prices for x. px = {1, 2, 3, 4, 5, 6, 7} For each of these px, py REMAINS the SAME at 1. In the excel...

Jim’s utility function is U(x, y) = xy. Jerry’s utility function is U(x, y) = 1,000xy...

Jim’s utility function is U(x, y) = xy. Jerry’s utility function is U(x, y) = 1,000xy + 2,000. Tammy’s utility function is U(x, y) = xy(1 - xy). Oral’s utility function is -1/(10 + xy. Billy’s utility function is U(x, y) = x/y. Pat’s utility function is U(x, y) = -xy. a. No two of these people have the same preferences. b. They all have the same preferences except for Billy. c. Jim, Jerry, and Pat all have the same...

An individual has the utility function: U(x,y)=xyx = $ spent on educationy = $...

An individual has the utility function: U(x,y)=xyx = $ spent on educationy = $ spent on other goodsThe individual receives a voucher that pays $S for education or a lump-sum subsidy of $S.1. What is the optimal bundle with the voucher?2. What is the optimal bundle with the lump-sum subsidy?3. With which option is she strictly better off?

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An individual utility function is given by U(x,y) = x·y1/2. This individual demand equation for x...

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