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- Pam is rich and at this high income level, her demand for good X is independent of income and given by X*=41.9- 5 px/Py where px and py denote respectively the price of good X and the price of good Y. Assuming the price of good Y is equal to 1, find the total amount Pam would be willing to pay (i.e., Pam's willingness to pay) for 5 units of good X and enter it below.What is the exact change in Jackie's consumer surplus. A+B7 How large is area 87 In this example, assume the price of music tracks (in pounds) increases from £0.6 to £1, as shown in the figure. Also, let Y be Jackie's income, which is £30. State Jackie's uncompensated demand function for music tracks given her initial budget Jackie has a utility function where is music tracks and is live music. Let py be the price of music tracks and let the price of live music be normalized to one If income, Y, is 30, what is Jackie's uncompensated demand for music tracks, 9₁? Jackie's uncompensated demand for music tracks, q₁, as a function of p Pounds pertrac 0.6 AA 6 10 Demand Music tracks 2Kate has the utility function U(x, y) = 100*x - \frac{x^2 }{2} + y where x is her consumption of earplugs and y is money left over to spend on other stuff. If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $70, then her net consumer's surplus Select one: a. falls by 2,800. b. falls by 800. c. falls by 600. d. increases by 400. e. increases by 1,600.
- Question Find the consumers' surplus at a price level of $8 for the price-demand equation p = D(x) = 40 – 0.4x where p is the price and x is the demand. Do not include a dollar sign or any commas in your answer.4. Consumer surplus for an individual and a market The following graph shows Becky's weekly demand for cheesecake, represented by the blue line. Point A represents a point along her weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line. PRICE (Dollars per slice) 7.50 6.75 6.00 + 5.25 Demand 4.50 + 3.75 3.00 2.25 + 1.50 + 0.75 + 0 0 Price 2 Becky's Weekly Demand P 4 6 8 10 12 14 QUANTITY (Slices of cheesecake) 16 18 20 ? From the previous graph, you can tell that Becky is willing to pay for her 8th slice of cheesecake each week. Because she has to pay only $3.00 per slice, the consumer surplus she gains from the 8th slice of cheesecake is $ Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Becky would receive a consumer surplus of S 8th slice of cheesecake she buys. from thePam is rich and at this high income level, her demand for good X is independent of income and given by X*=40.1- 5 px/py where px and py denote respectively the price of good X and the price of good Y. Assuming the price of good Y is equal to 1, find Pam's compensating variation if the price of good X rises from 2 to 4.3 dollars.
- Marvin has a Cobb-Douglas utility function, 0.5 0.5 U= 91 92 his income is Y = $900, and initially he faces prices of p₁ = $1 and p2 = $4. If p₁ increases from $1 to $2, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's change in consumer surplus (ACS) is $ minus sign if necessary.) Marvin's compensating variation (CV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.) (Enter your response rounded to two decimal places and include a Marvin's equivalent variation (EV) is $. (Enter your response rounded to two decimal places and include a minus sign if necessary.)The the consumer-facing the budget line P1x1+p2x2=M where p1 and p2 price is given as good 1 and 2 and x1 and x2 are quantity demanded for good 1 and 2 respectively,M is consumer income ,if the price of good 1 doubles ,the price of good 2 becomes 5 times larger and incomes becomes 3 times larger , write down an equation for the new budget line in terms of the original prices and incomeQuestion 3 3.1 Slutsky's equation relates the Marshallian demand function to the Hicksian demand func- tion, and therefore provides a way in which to decompose the total effect of a price change on quantity demanded into the substitution and income effects. Provide an expression for the general Slutsky equation of a good (x;) with respect to changes in the price of x;, and clearly label the total effect, substitution effect and income effect. 3.2 Now consider the case of a consumer with Cobb-Douglas indirect utility function v(р, у) (1-a) and Hicksian demand function for good 1 * (p, u) P2 ( Pi = au Pi P2 Demonstrate that the Slutsky equation holds for the own-price effect for good r1-
- assume that both X and Y are goods s.) Consider a person whose preferences can be represented by the utility function U(X,Y). T/F: "The following function could not possibly represent even a portion of this 4. person's Marshallian demand function for X: X"(Px.Py,1) Px 0py 261-25" true/falseSuppose Mr. Alemu consumes two commodities, X and Y. The income of Mr.Alemu is $200, and price of X is 5 and the price of Y is 15. The demand function for the comnmodity is given as: Qx=100-0.75y +0.251px^1/3 + 2py^3/2 where Qx is quantity demand of commodity X. 7Px is the price of commodity X, py, is the price of commodity Y and I is income. Then: A. Find the price elasticity of demand. Decide whether it is elastic, unitary clastic or inelasticSuppose that the market demand for Turkey is given by: Q_(T)=2-8P_(T)+2P_(C)+0.0015I Where Q_(T) is annual quantity demanded of turkey in million pounds, P_(T) is the price of turkey per pound, P_(C) is price of chicken per pound, and I is the average household income in dollars per year. a. Find the annual quantity demanded of turkey if the price turkey is $2.00 per pound, price of chicken is $1.50 per pound and the annual household income is $30,000.