Indifference map of a customer is given by formula Q1 = (3Q2 - c)2, and budget line by formula Q1 = -4Q2 + 10. Find the attainable combination of the goods with maximal utility for the customer.
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- Indifference map of a customer is given by formula Q1 = (3Q2 - c)2, and budget line by formula Q1 = -4Q2 + 10. Find the attainable combination of the goods with maximal utility for the customer.
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- 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.Suppose an individual has a utility function u (x1, x2) = 2*2. Present your mathmatical expressions below in the simplest form you can. a) Derive an expression for the marginal utility of good 1, and for the marginal utility of good 2. b) Using these, solve for an expression describing the slope of an indifference curve: MRS (11, 12). c) Sketch indifference curves for this consumer corresponding to u = 0,10,20. (Hint: z rı = k solves for m} = 11 (21) . Solve this expression and approximate it on a graph for the three values of k.)A utility maximizing consumer with preferences u(x, y) - x2y1/2 allocates 60 dollars towards the purchase of goods x and y. Prices are py - 0.5 and px – 1. With the purchase of a discount card prices are py - 0.5 and px - 0.25. Calculate the maximum fee the consumer should pay to purchase this card. Provide an Indifference Curve and Budget Line Diagram to illustrate and quantify the Substitution Effect (a to b) and Income Effect (b to c) of this price change. Quantify all intercepts and intersections.
- Given above are some of the indifference curves for a student who consumes Burritos and Pizzas and the relevant budget line. Equilibrium is defined as the maximum utility or satisfaction given the consumer’s budget. The consumer has more indifference curves above I3, below I1, and between I1 and I2 and between I2 and I3. Out of all the indifference curves the consumer has, only I1, I2, and I3 are shown. The given budget line touches I2 at the point where I2 touches the y-axis (Burritos axis). (a) What is the point of consumer equilibrium in the above graph where the consumer is maximizing utility (satisfaction) given the budget line. Please show the point and label it as “A”. (b) At the equilibrium point how much Pizza does the student consume? (c) If the price of Pizzas decreased and the price of Burritos remained unchanged, would the quantity of Pizzas consumed at equilibrium increase or decrease compared to the equilibrium point A in the graph given above? (d) If the…Given above are some of the indifference curves for a student who consumes Burritos and Pizzas and the relevant budget line. Equilibrium is defined as the maximum utility or satisfaction given the consumer’s budget. The consumer has more indifference curves above I3, below I1, and between I1 and I2 and between I2 and I3. Out of all the indifference curves the consumer has, only I1, I2, and I3 are shown. The given budget line touches I2 at the point where I2 touches the y-axis (Burritos axis). a) If the price of Pizzas decreased and the price of Burritos remained unchanged, would the quantity of Burritos consumed at equilibrium increase or decrease compared to the equilibrium point A in the graph given above? (b) If the price of Pizzas increased and the price of Burritos remained the same, would the consumer equilibrium point be different from point A or the same as point A in the graph given above?Greg has the following utility function: u=x053x047. He has an income of $64.00, and he faces these prices: (p₁.pz) = (3.00,4.00). Suppose that the price of x₁ increases by $1.00. Calculate the compensating variation for this price change. Give your answer to two decimals.
- Greg has the following utility function: u = x0.69x0.31. He has an income of $60.00, and he faces these prices: (P₁, P₂) = (1.00, 9.00). Suppose that the price of x₁ increases by $1.00. Calculate the equivalent variation for this price change. $Questions 1. Will's utility from vacations (91) and meals (92) is given by the function U(V, M) = 91 x 92. Last year, the price of vacations was $200 and the price of meals was $50. This year, the price of meals rose to $75, while the price of vacations remained the same. Both years, Will had an income of $1500. (a) What is the compensating variation for the price change in meals? (b) What is the equivalent variation for the price change in meals?Greg has the following utility function: u = x49x9.51 He has an income of $75.00, and he faces these prices: (P1, P2) = (4.00, 1.00). Suppose that the price of x1 increases by $1.00. Calculate the compensating variation for this price change. Give your answer to two decimals. $
- Determine the monotonicity and convexity of these preferences and briefly define what they mean. Calculate and interpret the marginal rate of substitution (MRS(x1,x2)) between the two goods for this consumer at the bundle(x1, x2)=(2,1).10) If indifference curves are concave to the origin, then at equilibrium: A) The indifference curve is tangent to the budget constraint. B) The consumer buys one good. C) The consumer buys a basket of goods. D) None of the above.Greg has the following utility function: u=x10.75x20.25. He has an income of $68.00, and he faces these prices: (p1,p2)=(8.00,4.00). Suppose that the price of x1 increases by $1.00. Calculate the equivalent variation for this price change. $