3. A consumer is faced with a utility function u(x, y) = 4x² + 3xy + y² And his budget constraint is given by ln(xy) = 5. a) Find the optimal values of x and y b) Find the value of the shadow price Interpret the value of lambda. Does it make economic sense?
Q: Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers…
A: GIVEN DATA Students with an allergy to pencil and erasers increases. There are some more students…
Q: II. PROBLEM SOLVING: Product Pineapple 2021 Price 600 2021 Quantity 5 1. Solve for the Real GDP…
A: Gross domestic product refers to the total value of all the goods and services produced in a country…
Q: part-d: Now suppose history had taken an alternative turn following the Great Depression. Suppose…
A:
Q: If a McDonald's Happy Meal costs $3, how many Happy Meals per week c Instructions: Round your…
A: Given information: A McDonald's Happy Meal costs $3 France's Per Capita income (in 2016) = $38,477…
Q: In one hour, Sue can produce 70 caps or 21 jackets and Tessa can produce 50 caps or 25 jackets. Who…
A: Opportunity cost is the benefit lost while making a different decision. You must compare the…
Q: Using your knowledge of money and banking, show how the equation of exchange can be used to confirm…
A: MV = PQ is the exchange equation. M is the money supply, V is velocity, P is the price level, and Q…
Q: Graphing: Using the Production Possibilities Schedule above, make a Production Possibilities…
A: Combination Unit of bracelets Units of rings A 0 205 P 10 200 L 20 194 I 30 187 E 40 179…
Q: Envous bifea yev 100 viex 10 sas 2/6 4 hoot to 100 12 4 ba75 ont 5 90 pad
A: Cross price elasticity of demand measures the responsiveness of change in quantity demanded of one…
Q: what is it that the three income hypothesis have in common, does it address the the deficiency in…
A: An individual's consumption behaviors and income are related to one another according to a…
Q: w does agriculture improve market role
A: Agriculture: Agriculture or tillage is the practice of growing crops and livestock. Agriculture was…
Q: Explain the IS schedule, and how the IS curve is derived in a Closed Economy.
A: The IS bend is the timetable of blends of the interest rate and the degree of income to such an…
Q: Explain your answer. What sorts of policies would you recommend?
A: Here the demand is inelastic and hence any incentive by the government would not influence the…
Q: When a nominal value increases it must be true that prices have increased. Select one: True False
A: Nominal value: face value of an asset or security.
Q: Introduction to Calculus in Economics: Calculus is a powerful tool used in economics. One of the…
A: The Average Cost is the per unit cost of production acquired by separating the total cost (TC) by…
Q: According to the globalist viewpoint, organisations like the United Nations and International…
A: With its headquarters in Washington, D.C., the International Monetary Fund (IMF) is a United Nations…
Q: Need some assistance with question. Explain and discuss the relationship between the elasticity of…
A: Elasticity is a measure of a variable's sensitivity to a change in another variable; it is most…
Q: Which of the limitations listed below best explain why scarcity occurs? Select the correct answer…
A: The inequitable distribution of resources is one of the fundamental causes of scarcity. There are…
Q: X4
A: In a market, decreasing cost industry refers to the one that has the ability o reduce its average…
Q: Question 1 Briefly answer the following questions pertaining to Zambia’s sovereign debt: a.What…
A: Debt A debt is an agreement to compensate the creditor with money or another agreed-upon value.…
Q: roblem Solving: Copy the questions and analyze the following demand problem. Answer mphasize the…
A: *Answer:
Q: how does a market economy and individual right works? explain.
A: The many laws and ordinances that make up the economy are referred to as the economic system.…
Q: Price, P pl PW PE Home market S Price, P World market D Quantity, Q Based on the above trade model,…
A: In the mentioned question we have given three graphs explaining the demand and supply , import and…
Q: The blue curve on the following graph shows the height of an airplane over 10 minutes of flight. The…
A: Slope is the mathematical instrument used in various studies that measures the rate of change of a…
Q: Problem 3 3,500 3,000 2,500 2,000 1,500 1,000 1900 1913 1929 1938 1950 1960 1973 Australia Canada…
A:
Q: In the circular flow diagram, firms produce goods and services, which they sell to households in…
A: GIVEN DATA According to the circular flow diagram Firms produce goods and services that they sold…
Q: 7. Suppose that a man lends $1000 for four years at 12% per year simple interest. At the end of the…
A: Compound interest (otherwise called compounding interest) is the interest on a loan or deposit…
Q: what are the three institution of government that protect individuals right in a market economy,…
A: Market Economy Supply and demand, multiple economic forces, govern the creation of goods and…
Q: Changes in the food industry
A: ANSWER: The correct option is (B) Change in the food industry Explain:- New junk…
Q: discuss how money supply is determine by the central bank and economics activities
A: Money : Money is something which is used to make transactions and which earns no interest. This…
Q: Suppose you are the production manager of a small perfectly competitive firm making a single…
A:
Q: For the following problems, SHOW YOUR WORK and round to one decimal point. If you struggle with the…
A: Given information C=125+0.75(Y-T) I=200-10r T=100 G is constant Ms=800 Md=P(0.8Y-16(r-πe)
Q: commonly used in your country. How is it calculated?
A: *Answer: A price index is a weighted average of the prices of a selected basket of goods and…
Q: Fruit prices and the amounts consumed for 2010 and 2018 are shown. Use 2010 as the base. Fruit…
A: Since an increase in the general price level is a broad definition of inflation, determining the…
Q: Draw a diagram showing a market for milk with the equilibrium price of $5/gallon. (ii) If diary…
A: Equilibrium in the market occurs at the intersection point of the demand and supply curve. Price…
Q: Critically discuss Rostow’s 5 stages of Growth theory and the criticism levelled against it? How can…
A: Rostow’s Growth Theory One of the most influential development theories of the 20th century is…
Q: Sports utility vehicles, premium sedans, pickup trucks, and compact cars are just a few of the many…
A: An economic system is defined as a system of allocating scarce resources. The economic system has to…
Q: I need help answer please quickly fast
A: It is a bunch of principles and ideas which explains the functioning of the economy or various…
Q: III. PROBLEM SOLVING: Lino Batumbakal is now exploring the option to start selling beef wellington.…
A: Demand refers to the quantity that a consumer wishes to buy at a given price in a given period of…
Q: (d) Find the royalty in each period. Show that, the discounted value of the royalty in each period…
A: (d) Royalty payments generally constitute a percentage of the net revenues obtained from the use of…
Q: K
A: We know that Monetary policy refers to the actions being taken by central bank of a country for…
Q: A student of macroeconomics would study which of the following concepts? Select the correct answer…
A: Macroeconomics refers to the economics which deals with the study of economics considering the…
Q: How is division of labor defined? Select the correct answer below: The average cost of producing…
A: Division of labour is the partition of a work interaction into various errands, with each…
Q: 5. What is the Demand Function? 6. What is the Supply Function? 7. What is the Equilibrium Point?
A: To find the demand function, we substitute the quantity and price values in the standard form of the…
Q: Explain the IS schedule, and how the IS curve is derivedin a Closed Economy
A: Closed economy: A closed economy generally refers to a country that does not trade with other…
Q: Post-Quiz Q: Assume that the demand curve D(p) given below is the market demand for widgets: Q =…
A: Producer Surplus is that area which are lies below the market equilibrium price and above the market…
Q: Consider the lottery that assigns a probability r of obtaining a level of consumption CH and a…
A: Risk premium is the amount which a consumer is willing to pay in order to avoid a risky event. RP =…
Q: II. Graphing: Using the Total Production Frontier below, make a TPF graph with proper point and axis…
A: Plotting the workers on horizontal axis and total production of the vertical axis, the graph is…
Q: hy is there so much unemployment and underemployment in the developing world, especially in the…
A: Unemployment: It refers to the people who do not have jobs to do. Increase in an unemployment shows…
Q: Using the supply and demand of labour and the accepted jobs schedule, explain the difference between…
A: Please find the answer below. DEMAND OF LABOUR: Businesses need labour and capital as inputs to…
Q: discuss the term money suply and explain its component in modern time
A: The most movable asset is money. It stands for the most basic type of capital asset. Money is widely…
Step by step
Solved in 4 steps with 2 images
- 3. Tom's utility function is U (x; y) = 3x+4y: His budget constraint is ax + by = 1, a,b,I > 0 a) Derive the demand function of x. b) Derive the demand function of y. c) Please draw the demand curve for y. d) If the price of x increases from a to c; what would the value of the Hickis substitution effect of x be?U(x, y) = xayb A consumer maximises utility subject to a budget constraint M = Pxx+Pyy Where px is the price of good x, py is the price of good y and M is the budget available. a. Derive an expression for the marginal utility of x. Under what condition is the marginal utility diminishing. b. Derive an expression for the marginal utility of y. Under what condition is the marginal utility diminishing.An individual’s utility function is given byU = x1√x2where x1 and x2 denote the monthly consumption of two goods. Unit prices of these goodsare $2 and $4 respectively, and the total monthly expenditure on these goods is $300.(a) Write down the budgetary constraint.(b) Find the optimal quantities of x1 and x2 the maximize U.(c) Verify that the stationary point is a maximum.
- 2) Which of the following utility functions represent the same preferences? Explain. a) U (x₁, x₂) = X₁ X₂ b) W (x₁, x₂) = 5lnx₁ +5lnx₂ c) V (x₁, x₂) = x₁¹/3x₂ ¹/3 - 0.8 d) Z(x₁, x₂) = 0.5x₁ + 0.5x₂8) When Marginal Utility = 0, Total Utility is A) Maximum B) Constant C) Minimum D) None of the aboveQUESTION ONE The only source of income available to Doreen, a level 200 student of UEW is her monthly stipend (M) from her parents. She neither saves nor borrows. Assuming she spends all her income on only two goods food (F) and Clothes (C), with Pr and Pc being the prices of the two goods respectively and having a utility function of the form: U = 6F°C i. Write an expression for Doreen's budget constraint. ii. Assuming good Fis on the vertical axis, produce a sketch of her budget constraint and determine the slope. iii. Find Doreen's monthly equilibrium demand functions for both goods. iv. With Pr and Pcgiven as ¢12 and ¢15 respectively and income of ¢300, calculate the equilibrium quantities of both goods. v. Compute the price elasticity of demand for both goods and interpret your results. vi. If income and prices of the two goods increase by 50%, calculate the equilibrium quantities of Food and Clothing.
- I. You only consume two goods and your preferences are represented by utility function U(x₁, x₂) = (x0.5 + x2.5)² for x₁ > 2 and x₂ > 0. 1. Find your marginal utility for each good. Simplify your answers. Based on your answers, are your preferences strictly monotonic? Why or why not? 2. Do your preferences obey the law of diminishing marginal utility for each good? Why or why not? If not, what is the behavior of your marginal utility for each good? Use calculus and words to answer this question.How does a consumer maximizes their utility given that they experience a budget constraint? Explain with graphical illustrations. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.1. Consider a consumer who consumes two goods. The utility function is given by u(x1, x₂) /2x1+1+√√√x₂, - where x > 0 denotes the amount of good i = the price of good 1 is 3, the price of good 2 is p2 > 0, and the income is 12. 1,2 consumed. Unless stated otherwise, (1) Calculate the marginal rate of substitution (measuring the value of good 1) at the consumption plan (x₁, x₂) = (3, 4). (2) Calculate the consumption plan that is optimal for the consumer. (3) Let v(p₂) denote the utility level at the optimal consumption plan. Calculate its derivative with respect to p2, i.e., v'(P2), at p2 = 3. (4) Suppose that p2 = 1 and the utility level is 10. Calculate the compensated demand for each good.
- Biwei’s utility function U=4XY, where X is consumption of beer and Y is consumption of pizza. For this utility function, the marginal utility of X is MUx = 4Y; the marginal utility of Y is MUY = 4X. 1) Suppose Y = 3. Calculate Biwei’s utility for X = 2, 3, 10, and 11. For a given level of Y, does good X display diminishing marginal utility? 2) Suppose X = 3. Calculate Biwei’s utility for Y = 2, 3, 10, and 11. For a given level of X, does good Y display diminishing marginal utility?3 8. Let be the utility function U(x, y) =(xi + 2ya), , where x and y are the quantities consumed of two goods. (a) Show that the functional equation U(x,y) U(2, 2) defines y as a function of x in a neighborhood of point (2, 2). (b) If the quantity consumed of good x increases by 1 unit, by how much does the quantity have to increase or decrease? Consumed of the good and to keep utility constant? (c) If the quantity consumed of good x increases by 1%, by how much does the quantity have to increase or decrease? Consumed of the good and to keep utility constant?Mariah consumes music downloads (M) and concert tickets (C). Her utility function is giveh by U = 0.5M? + 2C². a. Using calculus, what is the marginal utility of music downloads? b. Using calculus, what is the marginal utility of concert tickets? Write the equation for the MRSMC (i.e., the MRS of C for M; M is increasing, C is С. decreasing). d. Would the bundles of (M = 4 and C = 1) and (M = 2 and C = 2) be on the same %3D %3D %3D %3D indifference curve? How would you know? e. Calculate the MRSMC when M = 4 and C =1 and when M = 2 and C = 2. Explain why the %3D %3D values of MRSMC differ across these two bundles. f. Based on your answers above, are Mariah's indifference curves convex? Explain using the values calculated. er this