Question
In: Economics
Suppose Mary enjoys Pepsi and Coke according to the function U(P;C) = 4C + 5P. 1....
Suppose Mary enjoys Pepsi and Coke according to the function
U(P;C) = 4C + 5P.
1. What does her utility function say about her MRS of Coke
for Pepsi?
2. What do her indi§erence curves look like?
3. What type of goods are Pepsi and Coke for Mary?
4. If Pepsi and Coke each cost $1 and Mary has $20 to spend on
these products, how many units of each product should she buy in
order to maximize her utility?
5. Show this utility maximiz- ing combination combination of
Pepsi and Coke on the graph. how would her consumption and utility
maximizing bundle of Coke and Pepsi change if the price of Coke
decreases to 50 cents.
Please explain throughly!
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Braden views Coke (C) and Pepsi (S) as perfect substitutes. His utility function is: U =...
Braden views Coke (C) and Pepsi (S) as perfect substitutes. His
utility function is: U = C + S. The corresponding marginal utility
for each good is: MUC = 1 and MUS = 1. The
price of a 12-ounce can of Coke is $4 and the price of a 12-ounce
can of Pepsi is $3. Also, assume that his income is $60.
Find Branden's utility-maximizing bundle of Coke and Pepsi.
Make sure to show all your work.
Show his optimal...
II. Ms. Caffeine enjoys coffee (C) and tea (T) according to the function U(C, T) =...
II. Ms. Caffeine enjoys coffee (C) and tea (T) according to the
function U(C, T) = 3C + 4T.
a. What does her utility function say about her MRS of coffee
for tea? What do her indifference curves look like?
b. If coffee and tea cost $3 each and Ms. Caffeine has $12 to
spend on these products, how much coffee and tea should she buy to
maximize her utility?
c. Draw the graph of her indifference curve map and...
Suppose coke (c) and hamburgers (h) provide a consumer utility of U(c,h)= (c∗h)^1/2 (a) If coke...
Suppose coke (c) and hamburgers (h) provide a consumer utility
of U(c,h)= (c∗h)^1/2
(a) If coke costs 1 TL and hamburger costs 25 TL, how should
this consumer spend 100 TL that his mother gives him to maximize
his utility?
(b) Suppose government wants to discourage coke consumption by
taxing coke by 3 TL. From the point of consumer is it better to tax
coke or to tax income?
There are two goods – c and p. The utility function is U (P,C) = P...
There are two goods – c and p. The
utility function is U (P,C) = P 0.75 C 0.25.
$32 is allocated per week for the two goods, c and p.
The price of p is $ 4.00 each, while the price of c is $ 2.00
each. Solve for the optimal consumption bundle.
Suppose that the price for good p is now $ 2.00 each. Assuming
nothing else changes, what is the new optimal consumption
bundle.
Draw the appropriate...
The Price is Right! Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P....
The Price is Right!
Utilizing 1 of these public companies—Target, Coke, Pepsi,
Wal-Mart, or J. P. Morgan—determine the right price for that
company’s stock in the following 5 easy steps:
Visit this Web site.
Type in your selected company’s name in the Quote Search box,
and select your company's stock symbol. Jot down the current stock
price.
Select the Analysis tab, and find the Analyst Recommendation
box. Jot down the stock’s Earnings Per Share (EPS) Estimate.
Select the Price Ratios...
The Price is Right! Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P....
The Price is Right! Utilizing 1 of these public
companies—Target, Coke, Pepsi, Wal-Mart, or J. P. Morgan—determine
the right price for that company’s stock in the following 5 easy
steps: Visit this Web site. Type in your selected company’s name in
the Quote Search box, and select your company's stock symbol. Jot
down the current stock price. Select the Analysis tab, and find the
Analyst Recommendation box. Jot down the stock’s Earnings Per Share
(EPS) Estimate. Select the Price Ratios...
Suppose that the utility function is U(c, l) = c^(a) l^(1−a) where < a < 1....
Suppose that the utility function is U(c, l) = c^(a) l^(1−a)
where < a < 1. Calculate the slope of an indifference curve
for this utility function. What happens to the slope of the
indifference curve when c decreases and l increases? Explain.
According to a recent marketing campaign, 130 drinkers of either Diet Coke or Diet Pepsi participated...
According to a recent marketing campaign, 130 drinkers of either
Diet Coke or Diet Pepsi participated in a blind taste test to see
which of the drinks was their favorite. In one Pepsi television
commercial, an anouncer states that "in recent blind taste tests,
more than one half of the surveyed preferred Diet Pepsi over Diet
Coke." Suppose that out of those 130,66 preferred Diet Pepsi. Test
the hypothesis, using α=0.05 that more than half of all
participants will select...
Suppose the Demand and supply curve for a particular product is as follows: D(p)=60-5p S(p)=5p+20 Suppose...
Suppose the Demand and supply curve for a particular product is
as follows:
D(p)=60-5p
S(p)=5p+20
Suppose city council considers implementing a small lump sum tax
of $T per unit traded (i.e. if the consumer pays p then the
producer receives p-T).
Question: What is the tax incidence on
consumers?
Hint 2: The derivative of demand and supply with respect to
price is just the slope of the curves, in this case -5, and 5
respectively.
Carl enjoys Coffee (q1) and smoothie (q2) and the utility function is: U=q1^2 + q2^2 Suppose...
Carl enjoys Coffee (q1) and smoothie (q2) and the utility
function is: U=q1^2 + q2^2 Suppose that Carl has $100 spend on
coffee and smoothies and the price of a pitcher of smoothie is $10
and the price of a coffee jar is $4.
e) Derive Carl’s optimal bundle. Draw the graph of the budget
constraint and show the optimal bundle on the graph. Draw a free
hand indifference curve. It is not necessary to use the given
utility function...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- write a MIPS program to ask user to input the number of elements of array
- A disk drive has 300 cylinders, numbered 0 to 299. The drive is currently serving a...
- Write a function that tells whether a hailstone sequence contains a number that is greater than...
- 1D List Practice Could you write the code to solve the following problem that uses 1D...
- How the concept of moral hazard can be applied to the 2008 financial crisis?
- Write a program that prints and calls two methods. 1. Compute and return the future value...
- Assume you have been selected to lead your team in the development of a quality management...
ADVERTISEMENT