Q16 please help fast all info is there! Suppose the utility function of U(x1, *2) = x1/2x21/2 and the budget constraint of p1x1+P2X2=m. From the previous question, let's assume that the consumer needs to pay $1 quantity tax on good 1 p1+t=$2, p2=$2, and m=$120. Find the new optimal bundle.
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Q16 please help fast all info is there!
Suppose the utility function of U(x1, *2) = x1/2x21/2 and the budget constraint of p1x1+P2X2=m.
From the previous question, let's assume that the consumer needs to pay $1 quantity tax on good 1 p1+t=$2, p2=$2, and m=$120. Find the new optimal bundle.
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- A consumer’s weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer’s utility if they spend their entire weekly income on cell phones and watches? Explain your answer using marginal analysis. 1A. Suppose that this consumer’s income elasticity for watches is 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones? 2 Determine and explain the Profit Maximization output of a perfectly competitive firm1. Let Amy derive utility each from housing, h, and a consumer good, z, with the following utility function: 1/ U=h¾/3₂¾3 M Her Mashallian demand equations are the following: h= and z=- 3ph 2M 3p₂ Amy lives in a city where everyone works downtown. While her income is $160 per month, her commute cost (bus pass) costs her $40 per month, so she only has $120 to spend on h and z. (we assume no time cost of the commute) The consumer good, z, has a price of $1 and the price of her housing, h, is $2 per unit. a. What is her quantity demanded of h and z and what level of utility is she currently enjoying? She is considering moving to a location further from work to a house where her commuting cost would be $60 per month (so she will have $100 to spend on z and h). The market adjusts ph and housing sizes across the city so that utility is the same at every location around the city. b. What is the equation for the appropriate demand function for housing in this city? C. What the price of housing…A consumer has the following utility function: Ulx, y) = xy -y, *21 where x and y represents the quantities consumed of goods X and Y. y 20 What will be the substitution and income effects for X and Yassuming that the consumer attempts to maintain the same level of utility achieved before price of Y increased (that is, when price of Y was $1)? SEx= +0.5 IEx = -0.5 SE, = -0.25 IE- = -0.25 SEx= +0.293 IE = -0.293 SEy = -0.414 IE, = +0.414 SEr= +0.25 IE SE, = -0.75 IE, = -0.75 = -0.25 SEx= +0.414 IEx = -0.414 SEy = -0.293 IE, = -0.207 Income = $3 Px= $1, Py= $2
- A consumer's weekly income is $5000, the price of a cell phone is $1250, and the price of a watch is $500. What quantity of cell phones and watches will maximize the consumer's utility if they spend their entire weekly income on cell phones and watches? Explain your using I. answer marginal Suppose that this consumer's income elasticity for watches is analysis. 5.4. what does this indicate about watches? If the cross-elasticity calculates to 0.8 what does this indicate about the relationship between watches and cell phones?1/Muhammad’s perceives canned tuna (Y) as an inferior good and fresh tuna (X) as a normal good. If his income increases by 100%, and his income elasticity of both types of tuna is 1. Show the effect of this increase in income on the change in his optimal choice of canned and fresh tuna, highlighting his income-consumption curve. Clearly label your graph. Reflect the proportional changes in your graph 2/ Assume a piece of jewelry and 2 consecutive drops in its price. Also consider Alia’s demand to be relative elastic in the price range from ?1 to ?2, and that she perceives jewelry as a Giffen good in the price range from ?2 to ?3. Draw her price-consumption curve with well-behaved preferences. Clearly label your graph.Moe's income is $320 per week and he spends it on two goods, X and Y. Good X costs $8 and good Y costs $4 per unit. His utility function is U = 4.5XY. (a) Calculate Moe's utility-maximizing purchases of X and Y. (b) Calculate Moe's constrained utility- maximum if his income decreases by $2.00? (c) If the price of Y doubles, with no change in the price of X, by how much would his income have to increase to enable him to maintain his initial level of utility (as in part (a) above)?
- The figure below shows a consumer maximizing utility at two different prices (the left panel) and the consumer's demand for good X at the same two prices of good X (the right panel). The price of good Yis $4.50. The equation of the budget line passing through point r is R B 60 48 Demand for X Q. 24 18 24 Quantity of X Quantity demanded of X Multiple Choice Y-80 - (10/3)X Y 90 - (10/3)x Y=80 -0.3X Y= 90 - 0.3X Quantity of Y Price of XYou are choosing between two goods, X and Y, and your marginal utility from each is as shown below. Units of X MUX Units of Y MUy 10 8. 2 2 7 3 4 4 4 4 6. 6 Instructions: Enter your answers as whole numbers. a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, respectively, what quantities of each will you purchase to maximize utility? X = units. Y =O units. b. What total utility will you realize? c. Assume that, other things remaining unchanged, the price of X falls to $2.00. What quantities of X and Y will you now purchase? units. X =O units. Y = d. Using the two prices and quantities for X, derive a demand schedule (a table showing prices and quantities demanded) for X. Instructions: Start with the highest price first. Quantity Price DemandedIn two commodities world, utility function for a consumer and her income are given respectively. 11 U = x2y2 I= 480 If the price of these goods are Px= 15 and P, = 60 what would be her demand for these two goods * =? and y =? If the price of first good P has increased from 15 to 60. To keep her utility fixed how much does she need to spend for these two goods at least. In other words what should be her minimum income.
- TOTAL AND MARGINAL UTILITY Reset E UTILITY CALCULATIONS Total Utility Quantity Consumed 70 Total Marginal Utility Utility 60 50 40 22 30 22 20 18 10 40 14 4 6. 8 54 Quantity Consumed Marginal Utility 10 20 4 64 6. 10 5 70 1 3 4 2 -10 72 -20 -2 Quantity Consumed 70 Quantity Consumed -6 64 1 6. 8.PROBLEM You are choosing between two goods, X and Y, and your MU from each is shown in the table below. Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? Using the two prices and quantities of X, derive a demand curve for X. 5. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what maximum total utility for products X and Y that will you realize? Use a number, no decimal value, no commas, no space, no unit of measurement. 6. Assume that, other things remaining unchanged, your income is $9 and the prices of Y is $1, and the price of product X falls to $1. How many units of product X will you purchase to maximize utility? Use a number, no decimal value, no commas, no space, no unit of measurement. please answer all questions. ThanksJerry spends his entire budget on bread and gasoline. His preferences are complete, transitive, monotonic, and convex. For Jerry, bread is an inferior good that follows the law of demand. Moreover, his cross-price elasticity of demand for gasoline with respect to the price of bread is negative. Suppose the price of bread increases, all else constant. a. Create a chart to show the total, income, and substitution effects on bread and gasoline of the increase in the price of bread. b. Use budget lines and indifference curves to graphically illustrate the three effects. Be sure to label each effect on your graph (or through the chart from part a) and plot bread on the x-axis and gasoline on the y-axis
