3. Consider the following utility function: U = 5 x1 + 2 x2 Also consider the following bundles: A=(6, 6) B=(8, 4) C=(4,11) D=(7, 9) E=(9, 3) If x1=20, how much of x2 does the consumer has to consume to obtain a utility level of 150? 50 300 170 25
Q: General Electric (GE) produces wind turbines that generate wind power. Over the past 10 years, the…
A: A supply curve is a curve that shows the relationship between the price of a good and the services…
Q: Multiple Choice O O O a decrease in the demand for self-checkout machines. an increase in the demand…
A: Substitute goods refer to the goods which can be replaced by other goods.These goods have similar…
Q: A market segment consists of a set of buyers who share common needs or characteristics that the…
A: A market segment is a group of consumers who share similar characteristics or needs that make them…
Q: 31. The primary concern of economists worried about the crowding out effect is the A) growing size…
A: The crowding-out effect is an economic phenomenon that occurs when increased government spending,…
Q: A currency trader observes the following quotes in the spot market: 1 U.S. dollar 1 British pound 1…
A: An exchange rate can be defined as a rate at which one currency can be exchanged for another…
Q: Macroeconomics. Explain how the exchange rate adjusts to a temporary decrease in the foreign…
A: The factors like inflation, government debt, trade deficit, current account deficit, and other…
Q: DeBeers was able to profit the most from the diamond market by selling: a lot of diamonds at high…
A: Disclaimer :- Since u asked multiple question, we are solving first 1 as per guidelines. Profit can…
Q: The marginal revenue curve of a single price monopolist a. Is a horizontal line b. Lies along the…
A: Monopoly is a single firm in the market producing the unique good.In monopoly market structure there…
Q: Use an AD-AS framework to show the effect of monetary restriction on the output level, prices and…
A: "Monetary restriction" by and large refers to activities or policies set up by central banks or…
Q: Utility Maximization Nate is currently spending his entire budget on two goods: food and…
A: Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to…
Q: A country B monopolist sells solar panels to country A at $210, and to country C at $220 per unit.…
A: Dumping is a technique used by countries in which a country sells a product at a lower price to…
Q: Determine whether each of the following statements is true or false and justify your answer. (1) The…
A: Rationalizable Action Profiles: These are strategies in a strategic game that are considered…
Q: Table 2: Jupiter's Balance of Payments Assumptions (US$) A. Current account balance 3. Capital…
A: The Balance of Payments (BOP) is a comprehensive record of all economic transactions between a…
Q: The following graph shows the labor market for steelworkers. Assume that all firms in the steel…
A: Labor Demand describes the total amount of labor that an employer is willing to employ at a given…
Q: Figure 8-24. The figure represents the relationship between the size of a tax and the tax revenue…
A: Tax is imposed by the government on the income of individuals or corporations to fund public…
Q: a. Find on the internet some academic study or media article (newspaper or blog etc.) that relates…
A: Fiscal Stimulus: Government policies involving increased government spending and tax cuts aimed at…
Q: QUESTION 3 This image displays the production possibility frontier (PPF) for a country's choices…
A: Production possibility curve defines two goods possible combination which a country can produce…
Q: Figure 8-1 P PRICE & K L M N QUANTITY consumer surplus after the tax. Refer to Figure 8-1. Suppose…
A: The external market situation often allows the price to sell goods at a price higher than the price…
Q: Farmer Brown grows peaches. The average total cost and marginal cost of growing peaches for an…
A: Farmer Brown grows peaches in a perfectly competitive market. The market price of peaches is $40 per…
Q: hen quantity demanded decreases in response to a change in price for the good: the demand curve…
A: The law of demand states inverse relationship between price and quantity demanded. When price rises,…
Q: The down payment for a car loan of 100,000 AED is 20%. The loan has to be repaid in 3 years.…
A: When you take car loan for buying the car, you pay some initial amount in cash called down payment.…
Q: A multinational security software company is planning an overseas expansion that will cost $43…
A: A multinational security software company has planned a global expansion that will cost $43 million…
Q: The demand curve for cable TV services in a city is downward sloping. Suppose that cable TV services…
A: Monopoly is the market structure where a single seller sell the product with price description and…
Q: QUESTION 5 Which group of individuals most likely benefits from rent controls? single parent…
A: Rent Control is a form of price ceiling where government mandates the maximum rent that a landlord…
Q: Logistics List and describe the different types of modeling approaches that may be used to gain…
A: Modeling approaches are mathematical representations of real-world systems that are used to gain…
Q: How do you address issues of homelessness in the future?
A: Addressing homelessness in the future begins with proactive measures to prevent individuals and…
Q: QUESTION 10 Which of the following is normative economics form? Government should provide basic…
A: The branch of economics that deals with value judgments, opinions, and subjective analysis is known…
Q: The quantity theory of money implies that over the long run, the inflation rate will OA. equal the…
A: A framework for comprehending price variations in connection to the availability of money in an…
Q: Which of the following statements about the Canadian federal budget is FALSE? A. Currently, Canada…
A: A federal budget is a yearly gauge of the revenue and expenditures of a federal government. It is a…
Q: Explain under what kind of conditions would you expect cyclical unemployment to be rising
A: Cyclical unemployment: Cyclical unemployment occurs during economic downturns when demand for labor…
Q: Emma likes to call her friend regularly during the month, but he lives abroad. A call costs him…
A: Cost of call = 5 per minute Benefit for first 100 minutes = 10 per minute Benefit for second 100…
Q: 21) In Figure 5.5, what profit would the monopolist earn? P P4 P3 P2 P₁ MR Q* MC AVC D Figure 5.5 A)…
A: In a monopoly, there is a single firm dominating the market. The firm produces unique product with…
Q: Economic profits may result from: O a. innovation O b.risk taking O c. exploiting market…
A: Profit is the financial addition or advantage that a business or individual acknowledges when the…
Q: Assume MPS-.3, Actual Real GDP-$560 and Potential Output $300. Answer the following questions: A. By…
A: Fiscal policy refers to the government's use of its revenue and expenditure actions to influence the…
Q: Suppose a country which produces only agricultural goods and electronic goods. Both goods use…
A: A production possibility curve (PPC), also known as a production possibility frontier (PPF), is a…
Q: Suppose there are two countries that are identical in every way with the following exception:…
A: This can be defined as a concept that shows the total production of products and services in an…
Q: A firm uses inputs L and K to produce and good Q. The production function is Q-0.5LK. In the…
A: Costs refer to the expenses incurred in producing goods or services, such as labor, materials,…
Q: What will the federal government do to taxes?
A: The federal government uses fiscal policy as a tool to achieve economic stability.This involves…
Q: A firm sells its product in a perfectly competitive market where other firms charge a price of $110…
A: Perfect competition is a market form with a high number of buyers and a high number of sellers.…
Q: What "Economic profits are positive or negative " mean in terms of opportunity cost?
A: Opportunity cost defines the value of the next best choice that is given up when making a choice. It…
Q: MAGAZINES E Budget Constraint CDs B 17 Refer to the above figure. All of the points identified on…
A: Budget constraint shows different combinations of two goods that a consumer can afford with a given…
Q: If in Year 1 the price level was 100 and real GDP was $20 trillion and in Year 2 the price level was…
A: Real GDP refers to GDP computed at the market prices of some base year while nominal GDP is computed…
Q: What is the meaning of decolonization of social work?
A: Decolonization in social work refers to a process of critically examining and dismantling the…
Q: A monopolist serves market A with an inverse demand curve of P = 12 – Q. The marginal cost is…
A: In a monopoly market structure, There exists a single seller. There exists high barriers to entry…
Q: P=(MC)/(1+(1//E_(d)))
A: A monopolist is a market structure in which there is only one seller in the market and hence would…
Q: he Baby Boomers are a larger than average size demographic cohort in the United States. The Baby…
A: The amount of money that is accessible on the financial markets for both lending and borrowing is…
Q: 4. Using three-step method to analyze the effects of each even on the equilibrium price and quality…
A: Equilibrium Price: The price at which the quantity supplied equals the quantity demanded in a…
Q: What is a tariff? • A limit imposed on the production or sale of a product. • A maximum or minimum…
A: A tariff is a type of tax or duty imposed by the regulatory body on goods and services that are…
Q: 6. Effects of a tariff in a large nation The following graph shows the domestic market for steel in…
A: A tariff is a duty charged on imports of goods. A country imports a large proportion of goods from…
Q: Price (dollars) 7 6 5 3 2 1 80 100 110 Short-run MC O remain same; remain same; decrease O increase;…
A: The perfectly competitive market has a huge number of buyers and sellers. The market is…
3. Consider the following utility function: U = 5 x1 + 2 x2 Also consider the following bundles: A=(6, 6) B=(8, 4) C=(4,11) D=(7, 9) E=(9, 3) If x1=20, how much of x2 does the consumer has to consume to obtain a utility level of 150?
50
300
170
25
Step by step
Solved in 3 steps with 2 images
- 1. Pindyck and Rubinfeld (2018) Chapter 4 Appendix, Exercise #5 Jae has the following utility function: U(X,Y)= 20X+ 80Y – X² – 2Y?, where X is consumption of CDs, with a price of $1, and Y is consumption of movie videos, with a rental price of $2. Jae plans to spend $41 on both forms of entertainment. Determine the number of CDs and video rentals that will maximize Jae's utility. а.EXERCISE 7 Aisha is considering how to allocate the next 6 hours of her free time. She could choose between leisure (L) and helping her neighbour with the house chores. If she decides to help her neighbour, she is going to get paid at £25 per hour, which she can then spend on her favourite pizza (P). Suppose the price of pizza is £12.50. Aisha's preferences for leisure and pizza are given by the following utility function: U(L, P) = 3L + P. (MU₁ = 3, MUp = 1). a) Write down Aisha's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. b) Calculate Aisha's marginal rate of substitution between leisure and pizza. Explain the concept of MRS and interpret the figure obtained. c) Find Aisha's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. d) Would Aisha's optimal choice change if she could get a discount on her pizza purchases so…Question 2 David spends his budget on chocolate and chip. His utility function is given by ?(?1,?2)= 2?1?2, where ?1 is the number of chocolates he consumers per week, and ?2 is the number of chips he buys per week. A chocolate costs 10 SEK, and a chip costs 20 SEK. David’s weekly budge for consuming on these two goods is 120 SEK. (1) What is David’s budge line? Draw the budget line on a graph with chocolate amounts on the horizontal axis and chip amounts on the vertical axis. Write explicitly at which points budget line crosses the axis. (2) What is David’s marginal utilities for the two goods, respectively? What is his marginal rate of substitution between the two goods? (3) What is David’s optimal choice? Calculate the numerical answer for the optimal bundle. Also draw an indifference curve for David on the same graph as question(1) and show the optimal bundle.
- 5. What kind of preferences are represented by a utility function of the form u(x1, x2) = x1 + V*2? Is the utility function v(x1, x2) = xỉ + 2x1Vx2+x2 a monotonic transformation of u(x1, x2)? 6. Consider the utility function u(x1, x2) = Vx1x2. What kind of pref- erences does it represent? Is the function v(1, x2) transformation of u(x1, x2)? Is the function w(x1, x2) = xỉx, a monotonic transformation of u(x1, x2)? = x²x2 a monotonicQ6) Utility Ratio and Consumption Maximization A consumer downloads 3 movies and 4 apps per week. Suppose the price is $2 per movie and $2 per app, and the marginal utility for this consumption level is 6 for a movie and 8 for an app. Instructions: Round your responses to one decimal place. a. Calculate, show the formula, marginal utility per dollar. ..Per movie ......Per app b. Is this optimal consumption? c. If not, how should they change their consumption to maximize?Anatoly's marginal utility for DVDS (D) is MU X and his marginal utility for Xbox games (X) is MUx D. Anatoly's income is $120, the price of a DVD is $20.00, and the price of an Xbox game is $10.00. How many DVDS and Xbox games does Anatoly consume to maximize his satisfaction? Anatoly consumesDVDs andXbox games. (Enter your responses using integers.)
- 14. Consider the following utility function: U(x, y) = xy+x with MUx = y+1 and MUy = x.As the consumer buys more x, the marginal utility of x:(a) Diminishes(b) Remains constant(c) IncreasesQUESTION 12 The relationship between the marginal utility that George gets from eating a bag of cookies and the number of bags he eats per month is as follows: Bags of Cookies Marginal Utility 1 2 3 4 5 6 20 16 12 8 4 0 George receives 2 units of utility from the last dollar spent on each of the other goods he consumes. If cookies cost $4 per bag, how many bags of cookies will he consume per month if he maximizes utility?4. Minnie enjoys dessert by eating chocolate cake (C) and apple pie (P) according to the utility function U = Min [C, P]. In any given week, Minnie %3D spends £20 to purchase these two products. Assume that Minnie is a utility maximiser and has to pay 50p for a unit of apple pie and £2 for a unit of chocolate cake. (i) Consider the bundle C = 20 and P = 5. Is this the utility maximizing choice subject to Minnie's budget?. %3! (ii) Suppose that Minnie chooses the exact bundle that maximizes her utility. How would the utility maximizing choice of C be affected if price of P went up? (iii) Explain under which conditions the tangency condition does not work. Given that the tangency condition does not work, discuss how we can find out the optimal consumption bundle for a consumer.
- A consumer buys Bread (B) and Milk (M) each week at price of 20 and 16 respectively. Suppose that the consumer's current consumption of Bread and Milk is giving him MUBread = 80 and MUMilk = 70. Is the consumer buying the utility-maximizing combination of bread and milk? If not, how should he reallocate his expenditures between the two goods to maximize utility? Draw diagram and explain.3. Suppose Mary enjoys Pepsi and Coke according to the functionU(P;C) = 4C + 5P. What does her utility function say about her MRS of Coke for Pepsi? What do her indi§erence curves look like? What type of goods are Pepsi and Coke for Mary? If Pepsi and Coke each cost $1 and Mary has $20 to spend on these products, how many units of each product should she buy in order to maximize her utility? Show this utility maximiz- ing combination combination of Pepsi and Coke on the graph. how would her consumption and utility maximizing bundle of Coke and Pepsi change if the price of Coke decreases to 50 cents. 4. Vera is an impoverished graduate student who has only $100 a month to spend on food. She has read in a government publication that she can assure an adequate diet by eating only peanut butter and carrots in the Öxed ratio of 2 pounds of peanut butter to 1 pound of carrots, so she decides to limit her diet to that regime. a) If peanut butter costs $4 per pound and carrots cost $2 per…3) Suppose Joe's utility for lobster (L) and soda (S) can be represented as U =10.5 50.5 MUL=0.5 L -0.5 s0.5, MUs=0,5 L0.5 s-0.S. Joe walks into a restaurant with $72. Lobsters cost $18 each and sodas cost $2 each. How much lobster and soda will Joe consume if he intends to spend all his money? (There are no tax and no tips.)
