A consumer consumes two products X and Y. The price of product X is $2 and...

A consumer consumes two products X and Y. The price of product X is $2 and price of product Y is $4. Suppose xx-axis represents quantity of product X, and y-axis represents quantity of product Y. The optimal consumption bundle is (10, 5). If we plot the consumer's indifference curves on this graph, can you say what the slope of the indifference curve is at point (10,5)?

A) No. There is not sufficient information about preferences to answer that.

B) Yes. The slope is -1

C) Yes. The slope is -.5

D) Yes the slope is -2

Expert Solution

It is given that the optimal consumption bundle has 10 units of X and 5 units of Y.. the slope of the indifference curve that passes through this bundle should be equal to the slope of the budget line. Now the slope of the budget line is the price ratio, which is given by.-Px/Py or - 1/2 or -0.5. Therefore the slope of the indifference curve

select option C

Rahul Sunny answered 2 years ago

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price of good X is PX and the price of Y is Py. Your income that can be allocated to purchase these two items is M. Questions a. What happens if the price of education rises? Describe the substitution effect and the income effect. b. Derive the demand curve for education.

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price of good X is PX and the price of Y is Py. Your income that can be allocated to purchase these two items is M. Question a. What happens if the price of education rises? Describe the substitution effect and the income effect. b. Derive the demand curve for education.

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price of good X is PX and the price of Y is Py. Your income that can be allocated to purchase these two items is M. Questions a. What happens if the price of education rises? Describe the substitution effect and the income effect. b. Derive the demand curve for education.

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?

Norman Berhad sells two products; product X and product Y. The information about sales price, variable...

Norman Berhad sells two products; product X and product Y. The information about sales price, variable expenses and total fixed expenses is given below: Product X Product Y Selling price per unit RM50 RM100 Variable expenses per unit RM30 RM40 The total monthly fixed expenses of the company are RM 270,000. Norman Berhad wants to generate a sales revenue of RM 1,000,000 in the next month. To obtain this goal the company has the following options: Option 1: Sell 6,000...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part As and 4 Part B’s. Product Y requires 2 Part A’s and 3 Part B’s. The standard cost for Part A is $12 per unit. The standard cost for Part B is $24 per unit. During this month, the company purchased 50,000 units of Part A for $587,500 (there was no beginning balance). During this month, the company purchased 100,000 units of Part B...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part As and 4 Part B’s. Product Y requires 2 Part A’s and 3 Part B’s. The standard cost for Part A is $12 per unit. The standard cost for Part B is $24 per unit. During this month, the company purchased 50,000 units of Part A for $587,500 (there was no beginning balance). During this month, the company purchased 100,000 units of Part B...

Question

A consumer consumes two products X and Y. The price of product X is $2 and...

Solutions

Expert Solution

Related Solutions

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

You are a consumer who consumes goods X (education) and goods Y (recreation), where the price...

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...

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...

Norman Berhad sells two products; product X and product Y. The information about sales price, variable...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part...

We are analyzing 2 products – product X and product Y. Product X requires 3 Part...