Q)Suppose we have two goods, x1 and x2, with price p1 and p2, respectively. Consider the budget constraint x1p1+x2p2≤m. If both p1 and m double (i.e. p’1=2p1 and m’=2m), the area of the feasible consumption set: a) doubles B)stays the same D) quadruples C)none of the above E) falls by half

Q: Suppose a consumer’s preferences over two goods x1 and x2 are given by u = root(x_1 x_2). Her…

A: Answer: Given, Utility function: u=x1x2 Price of good 1 = p1 Price of good 2 = p2 Income = M The…

Q: An individual preference scale for two goods x and y is defined by the marginal rate of substitution…

A: Utility functions define the level of satisfaction or welfare of consumer with the given level of…

Q: Indifference curves are convex with respect to the origin. Thus they are steeper on the [Select ] v…

A: The indifference curve is the curve that exhibits equal utility to the consumer by the combination…

Q: True or False: (   ) when AVC curve is ˃ MC curve, then ATC has a negative slope  (   ) If MUy / Py…

A: Average variable cost (AVC) is total variable cost divided by output. Marginal cost (MC) equals the…

Q: Question 9 If income decreases and prices are unchanged, the consumer’s budget constraint...…

A: Income decreases: It means purchasing power has fallen. At the same prices, the consumer can buy now…

Q: Suppose that a consumer has the utility function u(x1,x2) : quantity of good i consumed, i = 1, 2.…

A:

Q: Which of the following statements is true? Select one or more options: a-If two different…

A: a. The equilibrium condition for getting the optimal choice is always the equality between the MRS…

Q: You are given the following utility function and price of commodities q1 and q2: U =…

A: Utility is maximized at the point where indifference curves are tangential to the budget constraint…

Q: Find Indirect utility function of the following function U= max (X, Y) subject to the budget…

A: Maximize U = Max(X,Y) Subject to Px*X + Py*Y ≤M This is the problem with cornor solution, here at…

Q: Suppose the utility function of a person consuming two commodities X and Y with income Birr 600 is…

A: Given values in the question are following -:…

Q: Utility maximization under constraint Lucas gets utility (satisfaction) from two goods, A and B,…

A: Given information Utility function of Lucas U=25[C-3+4D-3]-4+25 Lets take Price of C=P1 Price of…

Q: Which of the following statements is correct?   a. In a consumers’ utility maximization problems…

A: In terms of economics, utility describes the satisfaction and pleasure or satisfaction that a…

Q: Suppose the demand for frozen pizzas is given by the following equation: QD=100-50P +25P₂-1.51 where…

A: Demand is affected by the several factors such as the price of good, price of related good, and…

Q: Suppose a consumer’s utility function is u = x_1^(3/2) x_2^(3/2) . She spends her budget of £27 for…

A: According to the optimal consumption rule, when a consumer maximises utility, the marginal utility…

Q: A consumer consumes two agricultural products: Red Meat, and Tomatoes according to the following…

A: Let y  be the income of the consumer and let pR , pT be the prices of R and T. Then, given pR , pT ,…

Q: Consumer theory is built based on the concept of indifference curves, budget constraint lines, and…

A: The indifference curve indicates the alternate combination of two goods which gives the same level…

Q: Suppose the utility function is represented by the following equation: U (X, Y) = XY + X + 2Y + 2…

A: A budget limitation refers to the different combinations of goods and services that a consumer can…

Q: You have k20 per week to spend and two possible uses for the money: telephoning friends back home…

A: The utility maximization condition is given as MUx/MUy= Px/Py where MUx is the marginal utility of X…

Q: What is the value of MRS at the optimal point and what does this value mean? b. What is the optimal…

A: Since you have asked for multiple parts, we have solved first three parts for you. If you want the…

Q: The income-consumption curve for Dan between Qa and Qb is given by: Qa= Qb. His budget constraint is…

A: Given Budget = 120 Qa = Qb Now, 120 = Qa + 4Qb Put value of Qa = Qb 120 = Qb + 4Qb 120 = 5Qb Qb =…

Q: Consider the lottery that assigns a probability 7 of obtaining a level of consumption CH and a…

A: There are two consumption levels for the lottery : cH  , cL  Probability of cH = π Probability of cL…

Q: A consumer utility function is U=(x1,x2) Where X1 is the quantity of good 1 that is bought, X2 is…

A: Optimality of utility is attained where utility is maximized subject to budget constraint.

Q: Suppose a consumer has an income of $40, the price of A is $5, and the price of B is $4. Which of…

A: At Budget line:-                     APA+BPB=I where; A and B are two goods  PA= Price of good A PB=…

Q: The preferences of a consumer with utility function U (x1, x2) = (1+x1)(1+x2) are convex. [Note: You…

A: U ( x1 , x2 ) = (1+x1) (1+x2)

Q: Marina decides to purchase a ring made from an alloy composed exclusively of gold (G) and titanium…

A: Introduction: A customer is considered to be in an equilibrium condition when they believe that they…

Q: Solve; a consumer utility function is given as 64q10.5q20.25q30.4 1. what is the marginal utility…

A: Introduction We have given utility function of a consumer. He is taking three commodities such as…

Q: Assuming, there are two goods: Coffee and Tea. Your budget is 18,000 KRW per day. The price of…

A:

Q: Consider a consumer whose preferences satisfy monotonicity. Since the consumer prefers more to less,…

A: The consumer preferences would result in an increase in the utility which would result in an ever…

Q: What is the logarithmic transform of the utility function U= , given the budget constraint Pa, 21 +…

A: We have to find logarithmic transform of the utility function.

Q: Marina decides to purchase a ring made from an alloy composed exclusively of gold (G) and titanium…

A: Consumer will maximize its utility at a point where the slope of a budget line is equal to the slope…

Q: Suppose a consumer’s utility function is u = x_1^(3/2) x_2^(3/2) . She spends her budget of £27 for…

A: Income = 27  Price of x1 : p1 = 6 Price of x2 : p2 = 6  Budget Constraint without discounts : P1x1 +…

Q: Select the true or false for the following statement also give the explanation and support your…

A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…

Q: Suppose a consumer has an income of $100. P1=10 and p2=10. Draw the consumer’s budget…

A:

Q: (1A) If the consumer's income and all prices simultaneously decrease by one-half, then the optimum…

A: Note: In the BNED Guidance, only the first question can be answered at a time. Resend the question…

Q: An individual´s utility function is   U = x0.5 y0.5 While the budget constraint is…

A: MRS = MUxMUy = 0.5 x-0.5 y0.50.5 x0.5 y-0.5 = yx equating MRS to price ratio we get: yx = 14 y = x4…

Q: Assuming, there are two goods: coffee and tea. Your budget is 18000 KRW per day. The price of coffee…

A:

Q: Question 11 Not yet answered P Flag question Suppose a consumer has the Utility Function…

A: Answer -

Q: Assume the consumer is correctly applying the rational spending rule (consumer equilibrium) for…

A: Here, it is given that a consumer is in equal it implies that marginal utility per dollar spent on…

Q: The preferences of a typical Californian can be represented by the following utility function: U…

A: U (x1 , x2 ) = α ln(x1) + (1 − α) ln(x2) α=0.25 U (x1 , x2 ) = 0.25 ln(x1) + 0.75 ln(x2)

Q: The utility function for an individual is given as u (x; y)= xy. Suppose that his income is S 100…

A: This individual's budget constraint: The utility function for an individual is given as u(x:y)= xy…

Q: Refer to the above diagram. In this instance:   Question 5 options:   the BC line is diagonal…

A: Indifference curve: - it is the graphical representation of different combinations of two goods that…

Q: Question 3 Consider the utility function of the form: U = x¨*x2² Given the budget constraint: P1X1 +…

A: Answer to the question is as follows:

Q: Consider the following utility function: U= 100x0.50,0.50 A consumer faces prices of P, = $2 and P,…

A:

Q: Suppose the function for the utility from good c is denoted as U(c)=2c2. Which of the following…

A: The total utility is defined as the total satisfaction a consumer is able to get by consuming a…

Q: The preferences of a typical Californian can be represented by the following utility function: U…

A: U (x1 , x2 ) = α ln(x1) + (1 − α) ln(x2) α=0.25 U (x1 , x2 ) = 0.25 ln(x1) + 0.75 ln(x2)

Q: Consider the following utility function: U= 4X+Y. A consumer faces prices of P,= $2 and P, =1. %3D…

A: Answer: Given, Utility function: U=4X+Y The formula of the marginal rate of substitution (MRS) is…

Q: Consider the following utility function: U= 100x 50,0.50 %3D A consumer faces prices of P, = $2 and…

A: U=100X^0.5Y^0.5 Px=$2 Py=$1 MRS=1.83 MRS is the ratio of marginal utilities of the two goods In a…

Q: Jane receives utility from days spent traveling on vacation domestically (D) and days spent…

A: The marginal rate of substitution is the ratio of marginal utility of good x to the marginal rate of…

Q: Suppose that we have a utility function involving two goods that is linear of the form U = ax+by. a.…

A: We are going to calculate Demand function for x and y; Indirect utility function and expenditure…

Q: Find the marginal utility of an additional unit of good z for a consumer with utility function = zi…

A: Marginal utility is the added satisfaction a consumer gets from having one more unit of a good or…