Question
In: Economics
A utility-maximizing consumer believes two goods are Perfect Substitutes u(x, y) = 3x + 4y. She...
A utility-maximizing consumer believes two goods are Perfect
Substitutes u(x, y) = 3x + 4y. She pays pY = 2 and
pX = 1. Her income is m = 24. Next month the price of
good x will rise to pX = 3. Round your final answers to
3 decimal places.
What is the EV, CV and Approximate ΔCS?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
A utility-maximizing consumer who consumes quantity x and y of two goods has a quadratic utility...
A utility-maximizing consumer who consumes quantity x and y of
two goods has a quadratic utility function given by
Ux,y=x+y-0.05x2-0.05y2
subject to
2x+5y=128
Where $128 is the consumer’s budget and the prices of the two
goods are, respectively, 2 and 5. Assuming marginal utilities Ux,
Uy > 0,
a. Find the quantity x and y that maximize the utility function.
b. Using bordered Hessian, check utility for a maximum.
c. What is the maximum utility of the consumer?
A utility-maximizing consumer who consumes quantity x and y of two goods has a quadratic utility...
A utility-maximizing consumer who consumes quantity x and y of
two goods has a quadratic utility function given by
Ux,y=x+y-0.05x2-0.05y2
subject to
2x+5y=128
Where $128 is the consumer’s budget and the prices of the two
goods are, respectively, 2 and 5. Assuming marginal utilities Ux,
Uy > 0,
a. Find the quantity x and y that maximize the utility function.
b. Using bordered Hessian, check utility for a maximum.
c. What is the maximum utility of the consumer?
A utility-maximizing consumer who consumes quantity x and y of two goods has a quadratic utility...
A utility-maximizing consumer who consumes quantity x and y of
two goods has a quadratic utility function given by
Ux,y=x+y-0.05x2-0.05y2
subject to
2x+5y=128
Where $128 is the consumer’s budget and the prices of the two
goods are, respectively, 2 and 5. Assuming marginal utilities Ux,
Uy > 0,
a. Find the quantity x and y that maximize the utility function.
b. Using bordered Hessian, check utility for a maximum.
c. What is the maximum utility of the consumer?
A utility-maximizing consumer who consumes quantity x and y of two goods has a quadratic utility...
A utility-maximizing consumer who consumes quantity x and y of
two goods has a quadratic utility function given by
Ux,y=x+y-0.05x2-0.05y2
subject to
2x+5y=128
Where $128 is the consumer’s budget and the prices of the two
goods are, respectively, 2 and 5. Assuming marginal utilities Ux,
Uy > 0,
a. Find the quantity x and y that maximize the utility function.
b. Using bordered Hessian, check utility for a maximum.
c. What is the maximum utility of the consumer?
A consumer purchases two goods, x and y and has utility function U(x; y) = ln(x)...
A consumer purchases two goods, x and y and has utility
function U(x; y) = ln(x) + 3y. For this utility function MUx =1/x
and MUy = 3. The price of x is px = 4 and the price of y is py = 2.
The consumer has M units of income to spend on the two goods and
wishes to maximize utility, given the budget.
Draw the budget line for this consumer when M=50 and the budget
line when...
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
A consumes two goods, x and y. A ’s utility function is given by u(x, y)...
A consumes two goods, x and y. A ’s utility function is given
by u(x, y) = x 1/2y 1/2
The price of x is p and the price of y is 1. A has an income
of M.
(a) Derive A ’s demand functions for x and y.
(b) Suppose M = 72 and p falls from 9 to 4. Calculate the
income and substitution effects of the price change.
(c) Calculate the compensating variation of the price
change....
Suppose that the utility function of a consumer is U(x,y) = x ¼y ¾, where x...
Suppose that the utility function of a consumer is U(x,y) = x
¼y ¾, where x and y are the quantities of the
good X and good Y consumed, respectively. The consumer's income is
400.
(a) What is the demanded bundle when the price of good X is 10
and the price of good Y is 10?
(b) Redo part (a) when the price of good X is doubled?
(c) Redo part (a) when the price of good Y is...
Consider a consumer with the utility function U(X, Y) = X^2 Y^2 . This consumer has...
Consider a consumer with the utility function U(X, Y) = X^2 Y^2
. This consumer has an income denoted by I which is devoted to
goods X and Y. The prices of goods X and Y are denoted PX and
PY.
a. Find the consumer’s marginal utility of X (MUX) and marginal
utility of Y (MUY).
b. Find the consumer’s marginal rate of substitution (MRS).
c. Derive the consumer's demand equations for both goods as
functions of the variables PX,...
A consumer can choose between goods X and Y. The consumer's utility function is: U=5X2Y2 Use...
A consumer can choose between goods X and Y. The consumer's
utility function is: U=5X2Y2
Use following notation, as we have in class:
Price of X = PX, Price of Y = PY, Income =
I, the Lagrange multiplier = λ
If PX= 20, PY = 5, and I =
400,
what is the optimal amount of X that will maximize the
consumer's utility subject to these prices and income?
what is the optimal amount of Y that will maximize...
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