Amanda consumes three different products: apple (x), orange (y) and banana (z). Her utility function is U=xy^2z^3. The prices of the products: px=20, py=30, pz=40. Her income that she spends for fruits is 3,000. How many apple (x), orange (y), and banana (z) does she buy in case of optimal consumption?
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Amanda consumes three different products: apple (x), orange (y) and banana (z). Her utility function is U=xy^2z^3. The prices of the products: px=20, py=30, pz=40. Her income that she spends for fruits is 3,000. How many apple (x), orange (y), and banana (z) does she buy in case of optimal consumption?
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- Liz has a utility function of U(X,Y)=30XY, where X is food and Y is the composite good. The price of food is 10$ per unit. She has a 800 budget. What is her optimum amount of X to consume? Liz has a utility function of U(X,Y)=40XY, where X is food and Y is the composite good. The price of food is 10$ per unit. She has a 400 budget. The government assigns a 600$ subsidy to Liz With the hope that she will increase her food consumption. What is the new amount of X consumption for Liz?If Ginna spends her entire budget, she could buy a chosen set of groceries and also buy 10 notebooks. If she spends only half of her budget, she could only buy a set of groceries and could not afford any notebooks. Suppose Ginna's budget is £150. Her preferences for groceries (G) and notebooks (N) can be described by the following utility function: U (G, N) = 30G + 2N (MUG = 30, MUN = 2). a) Find Ginna's optimal consumption bundle. Provide both algebraic and graphical solution. Explain your reasoning. b) Discuss how the price of a notebook should change for Ginna to change her optimal consumption choice. c) If the price of a notebook increases by 50%, how should the price of the groceries drop so that Ginna can be as well off as before this change in prices? d) Discuss the implications of the price change from c) on Ginna's optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Ginna's demand for groceries and/or notebooks.EXERCISE 6 If Ginna spends her entire budget, she could buy a chosen set of groceries and also buy 10 notebooks. If she spends only half of her budget, she could only buy a set of groceries and could not afford any notebooks. Suppose Ginna's budget is £150. Her preferences for groceries (G) and notebooks (N) can be described by the following utility function: U(G, N) = 30G + 2N (MUG = 30, MUN = 2). a) Find Ginna's optimal consumption bundle. Provide both algebraic and graphical solution. Explain your reasoning. b) Discuss how the price of a notebook should change for Ginna to change her optimal consumption choice. c) If the price of a notebook increases by 50%, how should the price of the groceries drop so that Ginna can be as well off as before this change in prices? d) Discuss the implications of the price change from c) on Ginna's optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Ginna's demand for groceries and/or notebooks.
- Pele enjoys coffee (C) and tea (T) according to the function U(C, T) = 6C + 8T (a) What does her utility function say about her MRS of coffee and tea? (b) Suppose the price of coffee (PC) and the price of tea (PT) are both $3. If Alana has $12 to spend on these products, i. How much coffee and tea should she buy to maximize her utility? ii. Draw a carefully labeled graph of her indifference curve map and her budget constraint. Put the quantities of coffee on the horizontal axis. Be sure to identify the utility maximizing point. (c) Would Alana buy more coffee if she had more income? Explain. (d) Suppose the price of coffee fell to $2. How would her consumption change?Anatoly's marginal utility for DVDs (D) is MUD= X and his marginal utility for Xbox games (X) is MUx=D. Anatoly's incomes is $240, the price of a DVD is $40 and the price of an Xbox game is $20. How many DVDs and Xbox games does Anatoly consume to maximize his satisfaction? Give your response in integers.How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?
- Your utility function is defined as U = x¹/³y²/3 where x and y are the only two goods you consume. If the price of x is $25 and the price of y is $15 per unit respectively, with income $600, what would be your optimal utility maximizing consumption of x and y? Show all the steps.Ellie spends £20 on Energy drink (E) and Juice (J). Her preferences for these goods can be described by the following utility function: U ( E,J) = 2E + J^2 ( J squared) - J (MUt = 2, MUj = 2J - 1) Suppose that one energy drink costs £1.60 while one carton of Ellie’s favourite Juice costs £4.00. a) Find Ellie’s optimal consumption bundle. Provide both algebraic and graphical solution. Explain your reasoning. b) Discuss how Ellie’s optimal consumption choice would change when her disposable budget changes. c) If the price of energy drinks increases to £2.00 per can, how should the price of Juice change so that Ellie can be as well off as before this change in prices? d) Discuss the implications of the price change from c) on Ellie’s optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Ellie’s demand for Energy drink and/or Juice.The utility function of a consumer regarding two goods x and y is given byU(x,y) = x^(7.9)y^(9). Good x costs 19, and good y costs 80 units of money. The consumer's entire budget is 10800 units of money. How much is her optimal consumption of the good x?