Consider a representative consumer in a two goods economy of x and y. The price of good x is 1 TL and the price of y is 3 TL. This consumer is spending all his income at the basket he is currently consuming, and his marginal rate of substitution (MRS) of x for y is 2. Is he at an optimum? If so, show why. If not, explain how he can achieve an optimum point in order to maximize his utility?

Q: Goods 1 and 2 are perfect complements, and a consumer always consumes them in the ratio of 2 units…

A: Perfect complements are a pair of goods or services that are typically consumed together in fixed…

Q: Mr. Abdulah enjoys Coffee (K) and Tea (T), with the utility function U (K, T) = 3K + 4T. Question: -…

A: Substitute goods are those goods that are similar and have similar features and used in place of one…

Q: Suppose that a consumer has $200 to spend on two goods: beer and pretzels. The price of beer is…

A: Given  Price of beer (Pb)=$6 Price of pretzels (Pp)=$3 Pretzels are on x-axis and beer is on y axis.…

Q: onvex Constrained Consumer Choice Andrew has a Friday night utility function UA(z,b) = z * b for…

A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…

Q: Felina prefers to spend her living allowance of $1500 on Mobile data and food. She prefers to pay…

A: The utility is the want satisfying power of the commodity. The budget line would be the total amount…

Q: Consider a consumer who has utility function U(x,y) = x + 2y, where x is the amount of good 1, and y…

A: Utility function is a representation of a consumer's preferences, showing how they derive…

Q: Assume that a combination of two goods reflects a point of tangency between the budget line and an…

A: In consumer theory, the combination of goods and services that a consumer can acquire for his or her…

Q: How does a rational consumer choose his optimal consumption bundle? Graphically show the…

A: The economics as a study is based upon the idea that the economies, and the societies around the…

Q: Think of some other goods for which your preferences might be concave.

A: Concavity of the IC symbolizes that the MRS(marginal rate of substitution) of good X for Y rises…

Q: a) If the price of food is $1, and of all else is $2, how much of each good will Pat choose? b) If…

A: Consumer theory studies how people decide to spend their money based on their individual preferences…

Q: When May's income increases, she consumes more of goods A and B. Suppose there is no change in May's…

A: Price Effect: If the price of a good changes, then it affects the demand for the good. And we can…

Q: James Bond consumes two goods: vodka (x) and martini (y). His preferences are described by the…

A: The utility is the satisfaction derived by a consumer after the consumption of goods. Marginal…

Q: Donald derives utility from only two goods, carrots (Q.) and donuts (Qa). His utility function is as…

A: Utility is the satisfaction that a consumer derives from the consumption of a good. Indifference…

Q: x0.5 y0.5, A consumer has a Cobb-Douglas utility function u = and she has a bundle of goods (x, y) =…

A: The Cobb-Douglas utility function is a widely used form of utility function in economics that…

Q: Arthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a…

A: Indifference curve: Indifference curve shows different combinations of 2 goods such that consumer’s…

Q: Suppose that a consumer with the utility function U = X0.75 Y 0.25 choses a bundle where X=10 and…

A: According to the given question, the utility function is given as U=X0.75Y0.25 With the bundle…

Q: I. You only consume two goods and your preferences are represented by utility function U(x1, x₂) =…

A: Monotonic preference refers to a preference ordering in which an individual's preference for one…

Q: Suppose that a consumer with the utility function U = X0.75 Y0.25 choses a bundle where X=10 and…

A: Marginal utility per dollar is the ratio of marginal utility to the price of the good. It increases…

Q: sider the utility function U(x, y) = xy, which describes the enjoyment Emi gets from consuming s (x)…

A: Equilibrium condition:  MRSxy = Px/Py

Q: The utility function of a consumer regarding two goods x and y is given by U(x,y) = x^(7.9)y^(9).…

A: U(x,y) = x7.9y9  Price of x (Px) = 19 Price of y (Py) = 80 Total Income (M) = 10800

Q: A consumer derives his utility from two goods, the amounts of which are x and y, according to the…

A: Given  Utility function U=2lnx+lny         .......(1) Px=$2 and Py=$4 Consumer income =$48 We have…

Q: Draw the following scenario: Assume that Sam has well-behaved preferences and consumes hamburgers…

A: When the price(P) of a normal good(here, steak) falls, its quantity demanded rises. It can be split…

Q: f your preferences for peanut butter (good x) and jelly (good y) can be described by a perfect…

A: Answer to  the question is as follows :

Q: Imran consumes two goods, X1 and X2. his utility function takes the form: u(X1, X2)=…

A: Utility function is given as: U(X1,X2) = 4X13+3X25Px1=2Px2=4

Q: A utility function is given as U = √MB where B represents the quantity of books consumed and M…

A: A utility function me­asures how satisfied or happy an individual is when consuming goods and…

Q: Tom is willing to forego two gallons of milk in order to try his first container of rice pudding.…

A: As, Tom has consumed 0 rice pudding containers until now, therefore, he will be willing to give up 2…

Q: Miss Coco consumes cheese cake and curry puff. Her consumption yields the following total utility as…

A: Given; Price of cheese cake= RM8 Price of curry puff= RM4 Income; M= RM52

Q: When John maximizes his utility, his consumption bundle is (2 burgers, 3 burritos) and his marginal…

A:

Q: Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M,…

A: U(M,S)=M2/3S1/3M=PM+PSMUM=dUdM=M2/3S1/3M=23M-1/3S1/3MUS=dUdS=M2/3S1/3S=13M2/3S-2/3MUMPM=MUSPS23M-1/3…

Q: A consumer is always indifferent between one unit of good A and one unit of good B, no matter how…

A: When a customer is indifferent between one unit of good A and one unit of good B, regardless of how…

Q: Donald derives utility from only two goods, carrots (X) and donuts (Y). His utility function is as…

A: Utility shows the satisfaction that consumers receive after consuming a good or service. Utility…

Q: Rick consumes 2 goods, Chicken McNuggets (M) with Szechuan sauce (S). His utility function is U(M,…

A: In microeconomics, the function of U {"utility"} is described as a crucial term or concept in which…

Q: Carlos is originally consuming his optimal consumption bundle of cell phones and gasoline when the…

A: This can be described as a form of market in which no single producer or consumer has the power to…

Q: Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and…

A: In economics, utility refers to the pleasure or satisfaction that consumers get from using a…

Q: Sally consumes two goods, X and Y. Her utility function is given by the expression U = 2XY3. The…

A: Given Px =20, Py=10 and I = 500

Q: James Bond consumes two goods: vodka (x) and martini (y). His preferences are described by the…

A: Given: U(x,y) = (1x+9)y To find: Marginal rate of substitution in the point (2;2)

Q: Consider a consumer whose utility function is u(x, y) = √xy (MRS(x, y) = - a. Assume the consumer…

A: Budget constraint represents all the possible combinations of the goods or services that a consumer…

Q: Suppose we are able to model the total utility function for the consumption of two goods, good x and…

A: Utility is maximized when slope of indifference curve given by ratio of marginal utilities and slope…

Q: A consumer has an income of $400 and is deciding between two products: X and Y. Assume that the X…

A: Budget constraints All the possible combinations of goods and services that a consumer can acquire…