Answered: C) Draw the indifference curve…

C) Draw the indifference curve associated with a utility level of 36 and the indifference curve associated with a utility level of 72. Are the indifference curves bowed in toward the origin?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Related questions

Q: Government sets an emissions tax rate of $50 per unit. Compute this polluter's compliance cost.…

A: Compliance costs are payments involved with following the laws of a tax system, in addition to any…

Q: There are two different demand curves at your movie theaters. During the weekends, the inverse…

A: ***Since both the optimum quantities, for weekdays and weekends have been found out to be negative,…

Q: What financial systems? Give a detailed explanation of what is traded here and how it works. How do…

A: Financial systems refer to the numerous institutions, instruments, and mechanisms through which…

Q: X = Y = 1 Z= $5 2 3 $5 $5 4 5 $10 $10 Z Analyze the diagram and determine the unknown Answer: ieff =…

A: In this cash flow diagram, the length of one period is 1 month, and payment is done at the end of…

Q: Scruffie the cat has $15 to spend each month on cat toys, which cost $3 each, and cat treats, which…

A: The linear representation of a budget constraint is known as a budget line. The budget constraint…

Q: Using either Hofstede what is the country profile of a European country?

A: The cultural aspects theory of Hofstede offers a framework for contrasting and comparing the…

Q: Sword Properties in Knoxville, TN built a shopping center at a cost $50M in year 2010. The company…

A: Depreciation can be termed as a fall in the cost of assets that are fixed due to constant use of it.…

Q: Construct a model for the total revenue and implement it on a spreadsheet. Develop a two-way data…

A: In economics, substitute products are products that can be used as alternatives to one another. They…

Q: ings account at First Bank. The reserve requirement facing First Bank Is 8%. structions: Enter your…

A: Legally, commercial banks may be compelled to hold a portion of deposits received as reserves,…

Q: A monopolist is producing a level of output at which price is $198, marginal revenue is $103,…

A: In a monopoly market structure, There exists a single seller. The monopolist maximizes it's profit…

Q: In detail, explain why BPL is considered a natural monopoly and how URCA may establish a market…

A: The Utility Regulation and Competition Authority (URCA) Act 2009 is a piece of legislation in the…

Q: Gerstner added $20 billion in annual revenue to IBM. Which one of the following formulas would…

A: Profit is the amount of money a company earns after deducting all of its expenditures from its total…

Q: Eleanor and her little brother Josh are responsible for two chores on their family's farm, gathering…

A: Egg (in dozens) Milk (in gallons) Eleanor 10 5 Josh 2 2

Q: What type of ownership is created when a firm buys another outright

A: A firm seeks to expands its business by buying another firm outright. Such buying leads to the…

Q: at potential gdp there is only structural and cyclical unemployment True or false

A: Potential GDP is the output produced when the economy is at full employment.

Q: Please write one page about the following question: Is the rebound effect real? provide one…

A: The rebound effect is a phenomena in which rising demand or consumption partially or totally…

Q: Give the production function: Q(K,L) = L + K2 a. Find the total cost function (TC) if w = $2 (wage…

A: Monopoly and perfect competition are two extreme market structures that represent different types of…

Q: A monopolist faces a market inverse demand function: P = 250 – 5Q and marginal cost function: ATC =…

A: Demand function : 250 - 5Q MC = 10 Markup is the margin charged by monopoly over its marginal…

Q: Israel's "Iron Dome" Works! Israel’s Iron Dome is an air defense system designed to intercept and…

A: Suppose we have many options to choose. And when we choose one option that implies we are…

Q: A manufacturing company makes two types of water skis, a trick ski and a slalom ski. The relevant…

A: This question involves using linear programming to determine the optimal product mix for a…

Q: The table shows the approximate increase in sales that an additional $100 spent on advertising, at…

A: Given information: x R 25 4 50 59 75 94 100 107 125 104 150 78 175 33

Q: 17. Suppose a tax of $6 is imposed on sellers. (a) Calculate consumer surplus, producer surplus,…

A: Demand and supply forces determine the price and output level of the market. Equilibrium through…

Q: Suppose inverse demand is given by the following: P = 40 - 0.5Q There are two firms each with the…

A: Inverse demand is given as P=40-0.5Q=40-0.5(q1+q2)where q1 is the output of firm 1 and q2 is the…

Q: Determine the value of the given gradient factor. (P/G, 8.15%, 17) Final answer round to the nearest…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: ___ emphasizes economies of scale and decreases risk.

A: Economies of scale are the cost advantages that a company can obtain by expanding its activities. A…

Q: The goods and services produced, the quantity in which they are produced, and the prices at which…

A: There are various types of economies that exist in the world today. Some of the most common types of…

Q: Ryan deposited P2,000, P2,500 and P3,000 at the end of the 2nd year, 3rd year and 4th year,…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: provide a 99% confidence interval for each estimator's corresponding population parameter Intercept…

A: Y=16.8-3.9x (3.8) (1.2) The numbers 16.8 and -3.9 are the realized values for the intercept…

Q: There is monetary equilibrium in the economy. The total currency in the economy is $6 million, of…

A: The total currency in the economy is $6 million, public holds $4 million. The commercial banks’…

Q: Suppose the Federal Reserve sets the reserve requirement at 10%, banks hold no excess reserves, and…

A: The money multiplier refers to the potential increase in the money supply that can be generated by…

Q: 19. How much money should be invested monthly at 6% per year, compounded monthly, in order to have…

A: Compounding is the process of earning returns on an original investment by reinvesting those returns…

Q: Jenny is going to rent a truck for one day. There are two companies she can choose from, and they…

A: for Jenny, we need to compare the total costs for both companies based on the number of miles she…

Q: Calculate Rian's marginal revenue and marginal cost for the first seven phone cases they produce,…

A: Marginal Cost: Marginal cost (MC) is the cost of producing one additional unit of a good or service.…

Q: Between last year and this year, the CPI in Blueland rose from 100 to 120 and the CPI in Redland…

A: The value of one country's currency in relation to the currency of another country or economic zone…

Q: An incumbent firm has a cost function C = 100 + 1.5 q2 , so its MC = 3 q. An upstart firm has…

A: The Areeda-Turner rule is used to determine if a dominant firm's pricing strategy is…

Q: Under monopsony, wages are determined by: Demand curve Marginal Labour Cost…

A: A market structure known as a monopsony occurs when there is more than one seller than there are…

Q: Consider the behavior of long-term rates and short-term rates. Why do they behave differently?

A: In most cases, when we talk about short-term interest rates, we're talking about the interest rates…

Q: What is a default on the national debt? A. The Federal Reserve purchases Treasurys issued by the…

A: National debt, also known as public debt or government debt, refers to the amount of money that a…

Q: Which of the following is not an advantage of a multi-domestic strategy? Multiple Choice Focused on…

A: Multi-domestic strategy is a business approach that focuses on customizing products, services, and…

Q: inflation rate if the economy is at point A. Next, use the green point (triangle symbol) to plot the…

A: Given information In 2023, the price level will be 102. In 2024, if the aggregate demand is ADA,…

Q: When the total revenues in the federal government are greater than the total expenses in a given…

A: Budget surplus is when the government revenue is greater than the government expenses. Budget…

Q: Market demand is given by P = 28 - ½ Q. There is a single incumbent firm with constant MC = AC = 5,…

A: A market is any place where 2 or more parties can meet to involve in an economic transaction—even…

Q: Use the following table to determine the levels of M1 and M2 In the United State Money Categories in…

A: M1 and M2 are money supply which are also part of narrow money. M1 includes currency, demand…

Q: Equal end of year payments of $263.80 each are being made on a $1,000 loan at 15% per year…

A: Given: Yearly payments (PMT) = $263.80 Loan amount (PV) = $1000 Number of payments = ? Interest rate…

Q: Click here to watch "How Economic Inequality Harms Societies by Richard WilkinsonLinks to an…

A: The unequal distribution of income, wealth, and opportunities among people or groups in a society is…

Q: You own a bakery and the inverse demand function for your cakes is P = 8-1.5Q. If the cost of…

A: Total revenue is the total value of the commodities produced and sold in equilibrium.Economic costs…

Q: Savant Properties in Knoxville, TN built a shopping center at a cost $50M in year 2010. The company…

A: Depreciation is used to allocate the cost of an asset over its useful life for accounting and tax…

Q: Price and cost $40.50 36.00 30.00 22.00 20.00 0 MC 130 180 240 ATC AVC MR Quantity

A: One of the characteristics of a firm operating in a perfectly competitive market is that the firm…

Q: 2021 1,000 500 $1.00 $15.00 2022 1,100 500 $1.50 $14.75

Q: Justify the statement. True/False Externalily affect a third person which doesn't have any…

A: An economic term known as a "externality" describes how an economic action affects a third party…

Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

C) Draw the indifference curve associated with a utility level of 36 and the indifference curve associated with a utility level of 72. Are the indifference curves bowed in toward the origin?

The utility that Ann receives by consuming food F and clothing C is given by ?(?, ?) = √?? 4 + ?. Food costs N$5.00 a unit, and clothing costs N$15.00 a unit. Ann’s income is N$1850.00

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Indifference Curve

VIEW

Step 2: Graphical representation

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is ?(?,?) = ?? and Donna’s utility function is ?(?,?) = ?2? where x is strawberries and y is chocolate. Jim’s marginal utility functions are MUx=y and MUy=x while Donna’s are MUx=2xy and MUy=x2. Jim’s income is $100, andDonna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4?
2. Tom spends all his $100 weekly income on two goods, apples and bananas. His utility function is given by U (A, B) = AB, where A and B stand for the quantity of apples and bananas consumed by Tom. If PA = $4 and PB= $10, how many apples and bananas will he consume? Make sure you write out the utility maximization problem explicitly, including the decision variable(s). What if his utility function is given by U (A, B) = A0.5B 0.5?
Question 2 David spends his budget on chocolate and chip. His utility function is given by ?(?1,?2)= 2?1?2, where ?1 is the number of chocolates he consumers per week, and ?2 is the number of chips he buys per week. A chocolate costs 10 SEK, and a chip costs 20 SEK. David’s weekly budge for consuming on these two goods is 120 SEK. (1) What is David’s budge line? Draw the budget line on a graph with chocolate amounts on the horizontal axis and chip amounts on the vertical axis. Write explicitly at which points budget line crosses the axis. (2) What is David’s marginal utilities for the two goods, respectively? What is his marginal rate of substitution between the two goods? (3) What is David’s optimal choice? Calculate the numerical answer for the optimal bundle. Also draw an indifference curve for David on the same graph as question(1) and show the optimal bundle.
4. If we have the utility function, U(x)=(x−7)^2, and we know that there is an indifference set around x = 4 and an upper contour set of x = 6. How to graphically represent this function? I'm confused about how to draw the upper contour set on the graph? I know the concept that upper contour is the area over the convex line, but don't know how to put it on the graph. Could you draw a simple graph to help me identify the upper contour?
Assume Pat spends all of her allowance to purchase 4 apples and 4 candy bars. Pat's marginal utility of the fourth apple is 20 utils, and her marginal utility of the fourth candy bar is 40 utils. If an apple costs $1.00 and a candy bar $0.50, to maximize utility Pat should(A) purchase more apples and more candy bars(B) maintain the current purchase of 4 apples and 4 candy bars(C) purchase more apples and fewer candy bars(D) purchase fewer apples and more candy bars(E) purchase fewer apples and fewer candy bars
5. Julio who consumes two goods Food (F) and clothing (C) has a utility function given by U(F,C)= sqrt(F)C. The price of food is $3 and the price of clothing is $5 and Julio's weekly budget for food and clothing is $100. a. What is Julio's MRSFe (marginal rate of substiution of food for clothing) when utility is maximized? Explain. b. If Julio is at point where MRSFC= 1, where is that point relative to the utility maximzing bundle (show this in a diagram)? c. Can Julio change his bundle so as to increase his satisfaction and if so in what way? Explain fully Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
2. Sally consumes two goods, X and Y. Her utility function is given by the expression U = 3XY². The current market price for X is £10, while the market price for Y is £5. Sally's current in come is £500. (a) Sketch a set of two indifference curves for Sally in her consumption of X and Y. (b) Write the expression for Sally's budget constraint. Graph the budget constraint and determine its slope. (c) Determine the X,Y combination which maximises Sally's utility, given her budget constraint. (d) Calculate the impact on Sally's optimum market basket of an increase in the price of X to $15. What will happen to her utility as a result of the price increase?
A consumer with income I=120 facing prices pX = 4 and pY = 8 for two goods X and Y (for each good she prefers more to less) chooses optimally to consume 12 units of X. If the prices change and now pX = 6 and pY = 4, what is the possible range for her optimal X consumption? (like, x >/ 7 or 10 >/ x >/7…etc. Use indifference curve analysis on a graph to reason about the possible locations of the new optimal bundle.)
3) Suppose Joe's utility for lobster (L) and soda (S) can be represented as U =10.5 50.5 MUL=0.5 L -0.5 s0.5, MUs=0,5 L0.5 s-0.S. Joe walks into a restaurant with $72. Lobsters cost $18 each and sodas cost $2 each. How much lobster and soda will Joe consume if he intends to spend all his money? (There are no tax and no tips.)
Donald likes fishing (X1) and hanging out in his hammock (X2). His utility function for these two activities is u(x1, x2) = 3X12X24. (A) Calculate MU1, the marginal utility of fishing. (B) Calculate MU2, the marginal utility of hanging out in his hammock. (C) Calculate MRS, the rate at which he is willing to substitute hanging out in his hammock for fishing. (D)Last week, Donald fished 2 hours a day, and hung out in his hammock 4 hours a day. Using your formula for MRS from (c) find his MRS last week. (E) This week, Donald is fishing eight hours a day, and hanging out in his ham mock two hours a day. Calculate his MRS this week. Has his MRS increased or decreased? Explain why? (F) Is Donald happier or sadder this week compared to last week? Explain.
A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility yielded by their consumption is shown in the table below. Assume that the prices of X, Y, and Z are $10, $2, and $8, respectively, and that the consumer has an income of $74 to spend. (a) Complete the following table by computing the marginal utility per dollar for successive units of X, Y, and Z to one or two decimal places. (b) How many units of X, Y, and Z will the consumer buy when maximizing utility and spending all income? Show this result using the utility maximization formula. (c) Why would the consumer not be maximizing utility by purchasing 2 units of X, 4 units of Y, and 1 unit of Z? Product X Product Y Quantity Utility Marginal Quantity Utility Marginal Utility Utility per$ per$ 1 23 4567 42 82 118 148 170 182 182 1 23 4 5 6 7 14 26 36 44 50 54 56.4 Product Z Quantity Utility Marginal Utility per$ 1 23456 7 32 60 84 100 110 116 120 3..
Carla has utility function U(x, y) = vx + 2y over goods x and y a) Do we have a name for this type of utility function? Are Carla's preferences well-behaved? b) Let Carla have budget I=$40, and let prices be Px=$2, Py=$8. What bundle will Carla consume? c) What if Carla's budget drops to $20? [Think about: could this utility function describe Carla's preferences over bread and ice cream?]