User Account

All Pages

1 suppose a consumers preferences are represented by the

Assignment Help Microeconomics
Reference no: EM13347316

1. Suppose a consumer's preferences are represented by the utility function U = MIN(X,4Y). The price of Y is PY = 2, and the consumer has income, M = 210.

a) Graph the consumer's Price consumption curve for prices, PX = 1, PX = 2, and PX = 3. Be sure to label your graph carefully and accurately.

b) Graph the consumer's demand curve for X. Be sure to label your graph carefully and accurately.

2. Suppose a consumer's utility function is given by U(X,Y) = X*Y. Also, the consumer has $576 to spend, and the price of X, PX = 16, and the price of Y, PY = 4.

a) (4 points) How much X and Y should the consumer purchase in order to maximize her utility?

b) (4 points) How much total utility does the consumer receive?

c) (4 points) Now suppose PX decreases to 9. What is the new bundle of X and Y that the consumer will demand?

d) (4 points) How much money would the consumer need in order to have the same utility level after the price change as before the price change?

e) (4 points) Of the total change in the quantity demanded of X, how much is due to the substitution effect and how much is due to the income effect?

3. Suppose there are two consumers, A and B.

The utility functions of each consumer are given by:

UA(X,Y) = X*Y
UB(X,Y) = 2X + Y

The initial endowments are:

A: X = 4; Y = 2
B: X = 6; Y = 8

a) Using an Edgeworth Box, graph the initial allocation and draw the indifference curve for each consumer that runs through the initial allocation. Be sure to label your graph carefully and accurately.

b) What is the marginal rate of substitution for consumer A at the initial allocation?

c) What is the marginal rate of substitution for consumer B at the initial allocation?

d) Is the initial allocation Pareto Efficient?

 

Reference no: EM13347316

Questions Cloud

Assignment 1 product and engineering design reviewmust : assignment 1 product and engineering design reviewmust contain a brief description of the product then delve into
Note that the integrals for some of the resonances in the : note that the integrals for some of the resonances in the 1h nmr spectrum are higher than they should be due to the
Select article from the wall street journal the economist : select article from the wall street journal the economist the journal of accountancy or business week and give a
Question 1can our goal of maximizing the value of the : question 1can our goal of maximizing the value of the shares conflict with other goals such as avoiding unethical or
1 suppose a consumers preferences are represented by the : 1. suppose a consumers preferences are represented by the utility function u minx4y. the price of y is py 2 and the
Management function and behaviour1 how can the field of ob : management function and behaviour1. how can the field of ob contribute to the effective functioning of organizations
1discuss the reasons and demo of how nc and tftp services : 1.discuss the reasons and demo of how nc and tftp services are considering as the best remote support tools during a
Write reflective journal entries on any topicconcept : write reflective journal entries on any topicconcept related to elements of strategy. these will be inspired by a quote
Your recent review of management financial data for 201213 : your recent review of management financial data for 201213 has shown the following key statisticsfinancial

Reviews

Write a Review

Microeconomics Questions & Answers

  Explain total utility and marginal utility

Which of following is necessarily true regarding total utility (TU) and marginal utility (MU)?Newspaper vending machines are often built so that customers can pay to lift a door and take a paper off a pile of daily newspapers. Newspaper distributor..

  What kinds of all-or-nothing thinking have you detected

1. Do you agree with the necessity for autonomy as defined by the cognitive theorists Why or why not 2. What kinds of all-or-nothing thinking have you detected in yourself? How will you stop it

  What would the new price and equilibrium

Find the supply function for the hospitals and  Suppose the hospitals merge into one umbrella organization to improve their bargaining position. What would the new price and equilibrium be?

  What is eddies consumer surplus

What is the profit maximizing output if the price and What is the maximum profit that can be achieved - What is the marginal product of the 3rd worker

  Discuss the health care problem of limited access

Two major areas of health care reform involve universal access and containing costs. List the specific options discussed in your text that work toward these reforms.

  Find the cournot solution for the market price

Find the Cournot solution for the market price and output of mineral water and illustrate with a simple graph and the marginal revenue function facing a monopolist is given by: MR = 200-20Q Demonstrate that firms A and B have an incentive to coopera..

  Will the internet promote competition or cartelization

The extra flow of information through the Internet is likely to work to the benefit of buyers, pushing prices down. But in Web-based exchanges where there are only a few seller and many buyers

  In which country is level of steady-state output per worker

The economies of two countries, Thrifty and Profligate, have the same production functions and depreciation rates. There is no population growth or technological progress in either country. The economies of each country can be described by the Sol..

  Can you explain her decision

Vera has decided to upgrade the operating system on her new Pc. She hears that the new Linux operating system is technologically superior to Windows and substantially lower in price. However, when she asks her friends, it turns out they all use PCs w..

  Effects of ad-as model on aggregate demand

Using the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then: aggregate demand will decrease, aggregate demand will increase.

  Explain the effect of scarcity on economics

Scarcity shapes decisions about how to distribute goods. Because resources are scarce consumers buy fewer good.

  Demand curves and airline pricing

Suppose an airline flying on the Charolette-Chicago route has estimated the demand curves for three different types of customers: business (no advance purchase), leisure (7 day advance purchase), and discount (14 day advance purchase) travellers. ..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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