6 Rebecca consumes both iced tea and coffee. Iced tea is priced at $1.50 per bottle and coffee at $2.00per 16-ounce cup. Which of the following marginal utility pairs is consistent with Rebecca'sconsumer equilibrium at these prices?a. MU of iced tea = 1; MU of coffee - 1b. MU of iced tea -1; MU of coffee-2c. MU of iced tea -2; MU of coffee = 3d. MU of iced tea = 3; MU of coffee = 4e. MU of iced tea = 4; MU of coffee = 5

The objective of the question is to find the pair of marginal utilities for iced tea and coffee that…

Answered: 6 Rebecca consumes both iced tea and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Rohan’s current marginal utility from consuming peanuts is 100 utils per ounce and his marginal utility from consuming cashews is 200 utils per ounce. If peanuts cost $0.10 per ounce and cashews cost $0.50 per ounce, is Rohan maximizing his total utility from the kinds of nuts? Enter your responses as whole numbers. At the current level of peanut consumption, Rohan receives: utils per dollar.At the current level of cashew consumption, Rohan receives: utils per dollar.Therefore, Rohan maximizing his total utility because MUp/Pp is MUc/Pc.
Mike is a jellyfish wrangler. In June and July he spent his budget on fish tanks and wet suits. Each fish tank cost $50 and each wet suit cost $100. At Mike's optimal choice, his marginal utility from the last fish tank purchased is 200. This means that his marginal utility from the last wet suit purchased is:
4 .please show all calculations Draw a budget line with good X on the x-axis and Good Y on the Y axis. Graphically illustrate the effect of an increase in the price of good X on the utility maximizing quantity of X consumed. Make sure you identify the income effect and the substitution effect. Assume that the good is a normal good
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7. MRS and utility maximization Suppose your classmate Felix loves to eat dessert-so much so that he allocates his entire weekly budget to apple crisp and pie. The price of one bowl of apple crisp is $1.75, and the price of a piece of coconut crème pie is $7.00. At his current level of consumption, Felix's marginal rate of substitution (MRS) of apple crisp for pie is 5. In other words, Felix is willing to sacrifice five bowls of apple crisp for one piece of pie per week. Does Felix's current consumption bundle maximize his utility? That is, does it make him as well off as possible? If not, how should he change it to maximize his utility? Felix could increase his utility by buying more apple crisp and less pie per week. Felix could increase his utility by buying less apple crisp and more pie per week. Felix's current bundle maximizes his utility, and he should keep it unchanged.
4. Tim wants to maximise his utility given his utility function of U (A, B) = A² B¹. He faces the following prices and income: PA = 25; PB = 20; M = 250. However, a change in the price of good A to PA 22 will change his optimal bundle. If he is only interested in being able to consume his original bundle of goods, how much income would he need after the price change? = (a) Tim would require £54 less income (b) Tim would require £18.33 more income (c) Tim would require £10 less income (d) Tim would require £16.66 more income (e) Tim would require £16.66 less income
A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 63 and the marginal utility of product Beta is 40. The price of product Alpha is $9, and the price of product Beta is $5. The utility-maximizing rule suggests that, to stay within a given budget constraint, this consumer should Multiple Choice O O O increase consumption of product Beta and increase consumption of product Alpha. make no change in the consumption of Alpha or Beta. increase consumption of product Beta and decrease consumption of product Alpha. increase consumption of product Alpha and decrease consumption of product Beta.
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Suppose the marginal utiliy of a Coke is 15 utils and the price is $1. The marginal utility of a pizza is 20 utils and its price is $2. If you buy 1 unit each will you achieve consumer equilibrium? If not how can greater total equilibrium be obtained?
Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $

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