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

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. A consumer has an expenditure function given by E = Ū(P+). When the consumer has an income of 100, it can reach a maximum utility of 20. The price of x increases by 3 and the consumer's income increases by 25. Are they better off or worse off than before the changes? Explain how you know. Full solution please
4. John has a utility for the quantity of sandwiches, Xs, and quantity of burgers, Xp, that he consumes, represented by the following equation: U(X,X) = XX His income is Y = $24. The price of a sandwich changes from X, = $1 to X, = $4 while the price of a burger remains at X, = $6. Solve for the compensating variation and equivalent variation associated with this price increase.
4.An individual consumes products X and Y and spends $30 per time period. The prices of the two goods are $3 per unit for X and $3 per unit for Y. The consumer in this case has a utility function expressed as: U(X.Y) = 0.5XY How much X should this individual consume, given that he is maximizing the utility? ( A) 4.17 ( B) 5 (C)6 D) 6.25
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The table shows the total utility (TU) that James receives from consuming different amounts of two goods X and Y, per month. Quantity TUx MUx MUx/Px TUy MUy MUy/Py 0 0 0 0 0 0 0 1 50 50 16.67 75 75 25.00 2 88 38 12.67 117 42 14.00 3 121 33 11.00 153 36 12.00 4 150 29 9.67 181 28 9.33 5 175 25 8.33 206 25 8.33 6 196 21 7.00 225 19 6.33 7 214 18 6.00 243 18 6.00 8 229 15 5.00 260 17 5.67 9 241 12 4.00 276 16 5.33 d.How much total utility will James experience by buying the utility-maximizing combination? e.Suppose the price of good Y increases to $6. How many units of X and Y will he buy to maximize his utility now?
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