Question
In: Economics
An individual likes to consume 2 goods X and Y . The utility function for this...
An individual likes to consume 2 goods X and Y . The utility function for this individual is U = X+0.5Y . What
is the marginal utility of X and Y ?
The individual has an income of $90. The price of X is $10 and the price of Y is $5. What is the optimal consumption
bundle of this individual? Graph the
individuals optimal bundle with the budget line and indierence
curve. (answer: Infinitely many solutions).
Do the same question but change utility function to U=X+Y. (Answers
must be X=0, Y=18)
Solutions
Rahul Sunny answered 11 months agoRelated Solutions
Imagine you consume two goods, X and Y, and your utility function is U = XY....
Imagine you consume two goods, X and Y, and your utility
function is U = XY. Your budget is $100, the price of Good X is $4,
and the price of Good Y is $25. So, the optimal bundle for you to
consume is (12.5, 2). Now the price of good X increases to $10. The
compensated price bundle is (7.91, 3.16). What is the income effect
on X?
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·y1/2. This individual demand equation for x is a
factor a of I/px: x* = a (I/px). 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.)
Esther consumes goods X and Y, and her utility function is U(X,Y)=XY+Y For this utility function,...
Esther consumes goods X and Y, and her utility
function is
U(X,Y)=XY+Y
For this utility function,
MUX=Y
MUY=X+1
a. What is Esther's MRSXY?
Y/(X + 1)
X/Y
(X + 1)/Y
X/(Y + 1)
b. Suppose her daily income is $20, the price of X is $4
per unit, and the price of Y is $1 per unit. What is her
best choice?
Instructions: Enter
your answers as whole numbers.
X =
Y =
What is Esther's utility when her...
Imagine you consume two goods, X and Y, and your utility function is U = X1/2Y1/4....
Imagine you consume two goods, X and Y, and your utility
function is U = X1/2Y1/4. Your budget is M =
630; PX = $10; PY = $30. Now imagine PX increases to $25. The
compensated price bundle is (30.9458, 12.8941). What is the income
effect on X?
Imagine you consume two goods, X and Y, and your utility function is U = X1/2Y1/4....
Imagine you consume two goods, X and Y, and your utility function
is U = X1/2Y1/4. Your budget is M = 630; PX = $10; PY = $30. Now
imagine PX increases to $25. The compensated price bundle is
(30.9458, 12.8941). What is the income effect on X?
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 that there are two goods, X and Y. The utility function is ?(?, ?) =...
Suppose that there are two goods, X and Y. The utility function
is ?(?, ?) = 5?2 ?. The price of Y is $2 per unit, and
the price of X is P. Income is $2,400.
A.) Derive the demand curve and state the law of demand in
relation to your product or service.
B.) ? = 800 − 10?0.5 . Calculate elasticity of demand
when Q=100, Is the good elastic?
C.) ? = 800 − 10?0.5 − 0.5?. Calculate...
Suppose that there are two goods, X and Y. The utility function is ?(?, ?) =...
Suppose that there are two goods, X and Y. The utility function
is ?(?, ?) = 5?2 ?. The price of Y is $2 per unit, and
the price of X is P. Income is $2,400.
A.) Derive the demand curve and state the law of demand in
relation to your product or service.
B.) ? = 800 − 10?0.5 . Calculate elasticity of demand
when Q=100, Is the good elastic?
C.) ? = 800 − 10?0.5 − 0.5?. Calculate...
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