Figure 1Figure 2PRETZELS (Bags)BCOOKIES (Packages)E.PRETZELS (Bags)123COOKIES (Packages)Complete the following table by indicating which bundles Sam strictly prefers to H given only the information in each figure.Information Given By...6ABCDEFGIndicate whether each of the following statements is true or false given the graphs.StatementFigure 1 indicates that Sam prefers bundle C to B.Figure 2 indicates that Sam is indifferent among bundles C and B.True False

Along an indifference curve, all points result in the same level of total satisfaction (utility) to…

Complete the following table by indicating which bundles Sam strictly prefers to H given only the information in each figure. Information Given By... A B C D E F G Figure 1 0 0 0 Figure 2 D 0 0 Indicate whether each of the following statements is true or false given the graphs. Statement Figure 1 indicates that Sam prefers bundle C to B. True False Figure 2 indicates that Sam is indifferent among bundles C and B. 0 10

Complete the following table by indicating which bundles Sam strictly prefers to H given only the information in each figure. Information Given By... A B C D E F G Figure 1 0 0 0 Figure 2 D 0 0 Indicate whether each of the following statements is true or false given the graphs. Statement Figure 1 indicates that Sam prefers bundle C to B. True False Figure 2 indicates that Sam is indifferent among bundles C and B. 0 10

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...

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Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of 2 in gasoline money. He has a total of 10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremys consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.
Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
I like drinking Smirnoff and Stoli Vodka, but I really only careabout the total amount of alcohol I get out of it. They areperfect substitutes. Smirnoff is sold in liter bottles that are100 proof (that’s 50% alcohol). Stoli is sold in liter bottlesthat are 80 proof (40% alcohol). What is my utility functionfor bundles of these two vodkas? What do my indifferencecurves look like?
6. Sheila and Bruce are havinga tea party. Sheila is bringing 12 ounces of tea (x) and 15 finger sandwiches (y). Bruce isbringing 12 ounces of tea and 12 finger sandwiches. Sheila's and Bruce's preferences over tea and sandwiches can be represented by the utility functions: U*(x°,y*) = 6lm x³ + 17la y and UP(x".y") = la x³ + lm yB. a) What is Sheila's MRS at her endowment? What is Bruce's MRS at his endowment? Is the endowment point Pareto efficient? Illustrate in an Edgeworth box diagram the endowment point and a pair of indifference curves through the endowment point. Instead of trading directly with each other Sheila and Bruce trade with a market. Sheila and Bruce are both price takers on both the tea and sandwich markets. Each can buy and sell a good at the same price. Let Px be the price of an ounce of tea and Py be the price of a sandwich. b) Write the two equations that define the best bundle for Sheila given that the prices are Px and Py. Do the same for Bruce. Consider the…
4 Emily goes camping on the weekend and eats marshmallows (M) and crackers (C) there. She wants to match 1 marshmallow with 2 crackers, but does not eat in different proportion (i.e., perfect com- plement). The price of a marshmallow is 10 cents and the price of a cracker is 5 cents, and she spend up to $3 in total. a) Write down a utility function which represents Emily's preferences over marshmallows and crackers. b) How many marshmallows and crackers is she going to consume? (Hint: the first-order conditions will not help; draw the budget constraint and the indifference curves and look at the highest one that intersect the budget constraint). c) What is the exact value of Emily's indirect utility?
. Answer all parts (a) (c) of this question. (a) Consider an agent whose preferences over any couple (x1, x2), where 2₁ ER+ and x2 € R+, e.g., apples and oranges, is such that she prefers the bundle that is closest to having the same number of apples and oranges. Write a utility function u: R² → R+ which represent these preferences. A politician remarks "Our recent increases in the wage rates of teachers has been a total suc- cess! The shortage of teachers has been reduced drastically. Another, similar wage increase should eliminate this shortage entirely" (b) Explain and illustrate in a diagram what is meant by "income effects" and "substitution effects" of a wage rate change. (c) Explain and illustrate how you would model the labour supply decision of a potential teacher. Do you agree that the wage increase will increase the labour supply in this case? Carefully outline the assumptions underlying your argument.
5. Sheila and Bruce are taking a canoe trip. Sheila brought 10 boxes of peanuts (x) and 15 bags of chips (y). Sheila's utility function is U*(x,y) = lnvx*+ Invy°. Bruce also brought 20 boxes of peanuts and 5 bags of chips. Bruce's utility function is UB(x.y) = min[x', y'I. a) Illustrate the endowment point and draw a sample set of indifference curves through the endowment point. b) If Sheila and Bruce trade what will be the pattern of mutually beneficial trade? c) If the terms of trade are the number of bags of chips (y) per box of peanuts (x) then what is the largest value that these terms can be for a mutually beneficial trade in this economy? d) Find one mutually beneficial trade where the terms of trade are 1 bag of chips (y) per 2 boxes of peanuts (x). Suppose that Sheila and Bruce set up two competitive markets for peanuts and chips. Below you will show that if the price of peanuts (x) is $1 and the price of chips (y) is $2 then the markets for both peanuts and chips will clear.…
Mylie's total utility from singing the same song over and over is 70 utils after one repetition, 110 utils after two repetitions, 140 utils after three repetitions, 160 utils after four repetitions, 120 utils after five repetitions, and 60 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Repetitions 0 1 2 3 4 5 6 Total Utility Marginal Utility 0 70 110 140 160 120 60 b. Once Mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous song or less than the previous song? O More than the previous song O Less than the previous song
1) Suppose that Abel and Eden spend their incomes on two goods, food (F) and clothing (C).Abel’s preferences are represented by the utility function U(F,C)=10FC, while Eden’spreferences are represented by the utility function U(F,C)= 0.20F2C2A) With food on the horizontal axis and clothing on the vertical axis, identify on a graph theset of points that give Abel the same level of utility as the bundle (10, 5). Do the same forEden on a separate graph.B) On the same two graphs, identify the set of bundles that give Abel and Eden the samelevel of utility as the bundle (15, 8).C) Do you think Abel and Eden have the same preferences or different preferences? Explain 2. Graphically show the effect of an increase in price of Coca Cola on the demand of PepsiCola 3. Assume a budget line is drawn for two commodities: X on the x-axis and Y on the y-axis. Ifthe income of the consumer is 120 Birr, the y-intercept is 3, and the slope of the budget lineis -0.5 then determined the price of commodity…
Refer to the table below, which presents information on the total utility Alice derives (expressed in utils) from consuming different amounts of ice cream. Scoops of ice cream Total utility (utils) 1 10 2 18 3 28 4 38 46 43 B wwww 5 Does Alice's total utility exhibit the law of diminishing marginal utility? There is not enough information to answer this question Yes it does No it doesn't FI 2 W F2 M # 3 JAN 5 20 F3 E $ 4 888 F4 R % 5 T F5 A 6 MacBook Air F6 Y 887 & stv F7 U *8 ► 11 F8 A ►► ( 9 F9 76 1 0 W F10 Aa 4) zoom F11 Next SA F12
NIVERSITY DURAI Consider the following data describing the change in Nora's utility when she consumes various levels of Nuts and chocolate per week, the price per portion for the considered goods are respectively AED 20 and AED10. Nora has a budget equal to 160 per day to spend on her snack. Q Nuts Total UtilityQ Chocolate Total Utility ChocolateMU Nuts MU ChocolateMU/ AEDMU/AED MRS Chocolate Nuts Nuts 40 1 28 72 52 100 3. 72 4 124 88 144 5. 102 160 6. 114 7 172 122 1. Complete the table above by calculating the marginal utility, the marginal utility per dollar spent and marginal rate of substitution for each good. 2. Identify the potential set of equilibrium points Where MUI/P1=MU2/P2 Nuts Chocolate Income 2. 2. 6.
Quarts of ice cream Total utility from ice cream 0 0 1 80 2 150 3 210 4 260 From the information in the above table, what is the marginal utility of the third quart of ice cream? A) 80 B) 70 C) 60 D) 230 Pizza Pepsi Slices per week Total utility Quantity per week Total utility 0 0 0 0 1 100 1 70 2 150 2 130 3 175 3 180 4 190 4 220 5 195 5 250 The table shows Elaine's utility from pizza and Pepsi. If Elaine consumes 2 slices of pizza and 3 Pepsis, her marginal utility from the fourth Pepsi is ________ units. A) 60 B) 54 C) 40 D) 220 Fritos Fruit drinks Quantity Total utility Quantity Total utility 0 0 0 0 1 40 1 50 2 75 2 95 3 105 3 135 4 130 4 170 5 150 5 200 6 165 6 225 The table above shows the…