4. Problem Set #7 - Part II - 14 Bucky spends all his money on UW-Madison...

Problem Set #7 - Part II - 14

Bucky spends all his money on UW-Madison t-shirts and jugs protein powder (to help him bulk up for push-ups). A t-shirt costs $15 and a jug of protein powder costs $30. At his current consumption point, Bucky's marginal rate of substitution (MRS) of t-shirts to jugs of powder is 3. This means that Bucky is willing to trade 3 t-shirts for one jug of protein powder. Does Bucky's current bundle maximize his utility - in other words, make him as well of as possible? If not, how should he change it to maximize his utility?

		A. Bucky's current bundle maximizes his utility, and he should keep it unchanged.
		B. Bucky could increase his utility by buying fewer t-shirts and more protein powder.
		C. Bucky could increase his utility by buying more t-shirts and less protein powder.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

For the data set 1 4 4 4 7 7 7 9 12 13 14 14...

For the data set 1 4 4 4 7 7 7 9 12 13 14 14 14 15 16 16 17 17 19 20 22 23 23 24 24 25 26 26 27 29 29 31 34 34 35 35 36 37 43 44 44 47 48 48 49 50 52 52 54 54 55 56 56 58 58 59 59 60 64 64 65 66 69 69 73 76 76 77 77 79 (a) Find the 76th percentile. (b)...

Krishna only spends his money on clothes, c, and food, f. His utility function is quasilinear:...

Krishna only spends his money on clothes, c, and food, f. His utility function is quasilinear: U(f, c) = 10ln(f) + c. His income is $2000 per month. The price of clothes is $10 while the price of food is $5. 1. Derive his demand function for clothes and food. Given the prices and income, state quantity demanded of clothes and food. 2. Due to a new free trade agreement, the price of clothes falls to $5. What is the...

QSO 320 Problem Set (Problem Set 4-20) Complete problem 4-20 at the end of Chapter 4...

QSO 320 Problem Set (Problem Set 4-20) Complete problem 4-20 at the end of Chapter 4 in your textbook. You will demonstrate your work using Excel templates provided. You do not need to include a graphical procedure. Problem 4-20 X Y Profit $4 $5 =SUMPRODUCT(B5:C5,$B$4:$C$4) Constraints Labor 1 2 =SUMPRODUCT(B7:C7,$B$4:$C$4) <= 10 Material 6 6 =SUMPRODUCT(B8:C8,$B$4:$C$4) <= 36 Storage 8 4 =SUMPRODUCT(B9:C9,$B$4:$C$4) <= 40 LHS Sign RHS Hi All, The homework problem does not seem straight forward, so I put...

A consumer spends all of his income only on two goods, X and Y. His utility...

A consumer spends all of his income only on two goods, X and Y. His utility function is given by U=XY. The price of good X is $P and the price of good Y is $2. His income is $400. (4) Derive the PCC (price consumption curve) of this consumer as the price of good X changes . (3) Derive this consumer’s demand function for good X. (3) As the price of good X falls, this consumer’s demand becomes less...

A consumer spends all of his income only on two goods, X and Y. His utility...

A consumer spends all of his income only on two goods, X and Y. His utility function is given by U=XY. The price of good X is $P and the price of good Y is $2. His income is $400. Derive the PCC (price consumption curve) of this consumer as the price of good X changes . Derive this consumer’s demand function for good X. As the price of good X falls, this consumer’s demand becomes less elastic. True or...

Problem 7 (14 pts.) Tompkins Company bought some property this year and signed a $350,000, 4%,...

Problem 7 (14 pts.) Tompkins Company bought some property this year and signed a $350,000, 4%, 5-year note payable to obtain it. Tompkins’ monthly payment is $5,500. Complete the table below for the first three payments. Interest Expense Reduction of principal Remaining principal Month 1 Month 2 Month 3 Problem 8 (16 pts.) Use the following table to assist you in calculating your answers. Show your work. 2% 4% 8% 16% PV of $1 10...

John Q. Public spends all of his income on CDs and hamburgers. Draw his budget constraint...

John Q. Public spends all of his income on CDs and hamburgers. Draw his budget constraint for these products when the following are true: 1) Graph A: his income is $80, the cost of a CD is $2 and a cost of a burger is $2. 2) Graph B: his income is $120, the cost of a CD is $2 and the cost of a burger is $2. 3) Graph C: his income is $80, the cost of a CD...

(a) Haris spends all of his income on apples and oranges. He thinks that apples and...

(a) Haris spends all of his income on apples and oranges. He thinks that apples and oranges are perfect substitutes; one apple is just as good as one orange. Apples cost $4 a unit and oranges cost $5 a unit. His income is given by $120 per month. If the price of apples increases to $6 a unit, calculate the (i) Slutsky substitution (ii) Income and (iii) the total effect of a price decrease on the consumption of apples. (b)...

1-Consider the below data for ALL PARTS of this question: 4 2 5 7 8 14...

1-Consider the below data for ALL PARTS of this question: 4 2 5 7 8 14 1 5 23 17 What is the sample MEAN? ------------------------------------ Note: Enter X.X AT LEAST ONE DIGIT BEFORE THE DECIMAL, ONE AFTER and round up AFTER all calculations. Thus, 7 is entered as 7.0; 3.562 is entered as 3.6; 0.3750 is entered as 0.4; 17.351 is entered as 17.4 2-Consider the below data for ALL PARTS of this question: 4 2 5 7 8...

Sophia spends all her money on gummy worms and apps for her smartphone. A pound of...

Sophia spends all her money on gummy worms and apps for her smartphone. A pound of gummy worms and a smartphone app each cost $2. Sophia’s parents give her an allowance of $80 and 2 pounds of gummy worms each month. Draw her opportu- nity set, assuming that she cannot sell the gummy worms to her friends. How does her opportunity set change if she can sell the gummy worms at the market price of $2?

Subjects