Ray''s indifference curves corresponding to the utility level

Assignment Help Microeconomics
Reference no: EM13884798

1. Ray Starr has the utility function U(x,y)=y/(100-x) 

a. Does Ray prefer more to less of both goods?

b. Draw a diagram showing Ray's indifference curves corresponding to the utility levels U=1/2, U=1, and U=2 

c. How can you describe the set of indifference curves for Ray? Is the utility homothetic?

d. If the price of x is $1 and the price of y is $1, find Ray's demand for x as a function of his income and draw a diagram showing his Engel curve for x.

 

Identify the choice that best completes the statement or answers the question.

 

____ 1. In Ozone, California, people all have the same tastes and they all like hot tubs. Nobody wants more than one hot tub but a person with wealth $W will be willing to pay up to $.01W for a hot tub. The number of people with a wealth greater than $W for any given W in Ozone is approximately 1,000,000/W. The price elasticity of demand for hot tubs in Ozone, California, is

a.

?0.1.

b.

?0.01.

c.

?1.

d.

?0.4.

e.

none of the above.

 

 

____ 2. Dr. Social Science has recently figured out how to clone consumers. His first effort was done on the population of Walla, Washington. Each original citizen got a clone who had exactly the same income and preferences. Which of the following statements describes what happened to the demand function for tuna-fish casseroles in Walla?

a.

The elasticity doubled and the slope remained constant.

b.

The elasticity did not change at any price.

c.

The elasticity of demand doubled and the slope doubled.

d.

The elasticity halved and the slope remained constant.

e.

none of the above.

 

____ 3. At the price of $100, tourists demand 267 airplane tickets. At the same price, business travelers demand 237. At the price $110, tourists demand 127 tickets and business travelers demand 127. Assuming that the demand curves of business travelers and tourists are both linear over this price range, what is the price elasticity of demand at the price $100?

a.

?4.96

b.

?25

c.

?5.46

d.

?0.05

e.

none of the above.

Reference no: EM13884798

Questions Cloud

Differences between staffing for a stand-alone behavioral : Describe the similarities and differences between staffing for a stand-alone behavioral healthcare facility
Calculation of pension liability according to balance sheet : Foster Corporation received the following report from its actuary at the end of the year: The amount reported as the pension liability on Foster's balance sheet at December 31, 2012 is
How do you calculate the marginal rate of substitution : How do you calculate the marginal rate of substitution?
Calculate the equilibrium composition : Methanol can be manufactured by the gas phase reaction CO(g) + 2H2(g)?CH3OH(g)at 400K and 1.013 bar.The following data are available;?H298= -90.71 kJ/mol?G298= -24.33 kJ/mol.
Ray''s indifference curves corresponding to the utility level : 1. Ray Starr has the utility function U(x,y)=y/(100-x)  a. Does Ray prefer more to less of both goods?b. Draw a diagram showing Ray's indifference curves corresponding to the utility levels U=1/2, U=1, and U=2
Explain the immune system''s role in protecting the body from : Explain the immune system's role in protecting the body from disease
Finding reactor size for adiabatic operations : Explain the graphical design procedure for finding the reactor size for adiabatic operations ofPlug flow and Mixed flow reactors.(May-2005 & Dec-2005) and The flowthrougha tubularreactor, inwhicha first order irreversible liquid phase reaction tak..
Will charge a price equal to the marginal cost : Will charge a price equal to the marginal cost.Will charge the highest prices to those customers with the least elastic demand.Will capture all of consumer surplus as profit for the firm.Will charge the highest prices to those customers with the most..
What is the structure''s angular velocity : Far out in space, a mass m1=148300.0 kg rocket and a mass m2= 245000.0 kg rocket are docked at opposite ends of a motionless 87.0m long connecting tunnel.

Reviews

Write a Review

 

Microeconomics Questions & Answers

  The amount consumers spend on health care

One way to reduce the amount consumers spend on health care is to raise the price of health care by increasing the health insurance copayment

  Hospitals and pharmacies are the main buyers of dermaplus

You're BioMed's resident economic expert. Harry the CEO is asking you to complete a time-sensitive project that another person, Selwyn, had started working on before he retired. Harry explains that BioMed has a manufacturing plant that produce..

  Why might pc ownership be correlated with u

Suppose that, four years ago, the university gave grants to buy computers to roughly one-half of the incoming students, and the students who received grants were randomly chosen. Carefully explain how you would use this information to construct an..

  What are the banks excess reserves

What are the banks excess reserves and what is the maximum amount of additional loans that the bank can make? Show your computation.

  How to discourage long run growth through their policies

Analyze the roles of physical capital, human capital, technology, and natural resources in influencing long-run economic growth of aggregate output per capita, and how governments can contribute, or discourage long run growth through their policie..

  Gold standard and quantitative easing

Give two reasons for (20 points) and two reasons against backing a currency with gold. Then develop your position either for or against backing the US currency with gold and substantiate your assertions.

  Market efficiency of the healthcare system

Propose several current and future economic issues confronting and changing the healthcare system. Analyze the significant implications of the issues in question for market efficiency of the healthcare system. Provide a rationale for your response..

  Draw a supply-and-demand digram

Draw a supply-and-demand digram to show what happened to price, quantity, consumer surplus, and producer surplus in the market for computers.

  Discuss how the methods and tools identified

Identify methods and tools common to addressing economic challenges in the health care industry - Discuss how the methods and tools identified relate to health care reform.

  What is afc per poster

What is her AFC per poster if she prints 1,000 posters - Karen runs a print shop that makes posters for large companies.

  Maximize consumption-wadgetland should produce-wadgets

Widgetland has 60 workers. Each worker can produce 4 widget(s) or 4 wadget(s). Each resident in Widgetland currently consumes 2 widget(s) and 2 wadget(s). Wadgetland also has 60 workers. Each can produce 3 widget(s) or 12 wadget(s).

  Firms can operate in one or more markets and not always on

firms can operate in one or more markets and not always on the same side of the market. general motors is a buyer in

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd