(2) (a) Write out Ann's expenditure minimization problem for U(x, y) > Ū. (b) Write out the tangency condition for expenditure minimization. (You do not need to show your work.) How does it compare to the tangency condition in Part (1c) above. Explain (50 words or fewer.) (c) Now set, P₂ = 4 and Py = 2. Use the tangency condition and U(x, y) = U to solve for Ann's compensated demands as a function of U. (Normally, compensated demands are functions of U, Pr, and Py. Here we have explicit values for the prices, and compensated demands will be a function of only Ū. It is worth noting that if a = 6³, then b = a) (d) Use your answer to Part c to write out Ann's expenditure function.

A consumer has preferences over bundles of two goods with indifference curves defined by X2 = for k>0. (a) Find a utility function representing these preferences assuming that the consumer's pref- erences are monotone. (b) Give an example of a utility function representing non-monotone preferences with the same indifference curves. (c) Show that indifference curves of the form x2 = x + k for k € R cannot arise from monotone preferences.

Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by: U(xi, x2 ) = x" a) What is the consumer's demand for x, as a function of income and prices? What is the consumer's demand for x; as a function of income and prices? Use Lagrange method or your intuition. b) What percentage of income does the consumer spend on x;? What percentage of income does the consumer spend on x2?

marginal utility is a measure of the benefit (or value, or enjoyment) a person obtains by a) Consuming a single additional unit of a product. b)Selling a single additional unit of a product (and spending the resulting cash). c) Borrowing the dollar value of a single additional unit of a product (and spending it on something nice). d)Converting a single additional unit of product to an equivalent number of units.

EXERCISE 5 Loise spends £20 on tea (T) and coffee (C). Her preferences for these goods can be described by the following utility function:  ( , ). Suppose that one cup of tea costs £1.60 while one cup of Loise’s favourite coffee costs £4.00. Find Loise’s optimal consumption bundle. Provide both algebraic and graphical solution. Explain your reasoning. Discuss how Loise’s optimal consumption choice would change when her disposable budget changes. If the price of tea increases to £2.00 per cup, how should the price of coffee change so that Loise can be as well off as before this change in prices? Discuss the implications of the price change from c) on Loise’s optimal choice. In your discussion, include the analysis of the substitution and income effects as well as Loise’s demand for tea and/or coffee.

Please help me to solve questions (a) (b) (e). (especially question e). thank you!

It is proven mathematically that indifference curves are convex due to:(a) rising marginal rates of substitution.(b) the inverse association between the quantity demanded and the price.(c) costs decreasing in value.(d) the marginal rates of substitution being negative.

3. A consumer's indirect utility function is given by V (p, y) = f(p)y. (a) What is the form of this consumer's expenditure function? (b) What kind of preferences does this consumer have?

A consumer has preferences over two goods, carrots and turnips, each measured in kilograms. For each of the following scenarios, identify which, if any, of the standard assumptions of preferences are violated. (a) The consumer will never eat more than ten kilograms of carrots per day. (b) The consumer cares only about the total weight of the two vegetables consumed, and always prefers more to less. (c) The consumer cares only about the product of the respective weights of the two vegetables consumed, and always prefers a greater product to a lesser one.

Tim is buying pizza and salad for a company lunch. Suppose that a slice of pizza costs $4.00, and a bowl of salad costs $5.00. Let ♬ be the amount in dollars that Tim spends on pizza and salad. If Tim buys P slices of pizza and S bowls of salad, then the total amount of money he spends (B) can be represented by the equation Now rearrange the equation you wrote above so that S is written in terms of E and P. The quantity of salad he buys can be represented by the equation Suppose Tim has $40.00 to spend on pizza and salad; that is, E = $40.00. Complete the following table with the values of P or S that make the equation true. Hint: To complete the first row, determine the number of salad bowls Tim can purchase with $40.00, when the number of pizza slices he purchases is 0. Budget Pizza (Dollars) (Slices) 40.00 0 40.00 5 40.00 Use the black line (plus symbols) to plot the line illustrating the combinations of pizza and salad that Tim can purchase with a budget of $40.00. SALAD (Bowis) 14…