Answered: Draw an indifference map for each of…

Draw an indifference map for each of the following functions. U(x,y) = x2y3 U (x, y) = 2x + 3y U (x, y) =x + ln(y) U (x, y) = min{2x, 3y} U (x, y) = max{3x, 2y}

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Kamau's utility function for watching football (F) and drinking a soda (S) is given by the function…

A: Consumer surplus is the benefit that the customer receives from purchasing the commodity at a price…

Q: 1. Prove if the indirect utility function is quasiconvex The indirect utility function: V(p,w) =…

A: Indirect utility capacity is gotten from direct utility capacity with boundaries of use and cost of…

Q: The goal of the consumer is to maximize the total utility or satisfaction derived from their…

A: The total value or benefits being derived by an individual from the consumption of units of goods or…

Q: 1. Joan is on summer break and spends most of her time either playing video games or browsing the…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subparts question…

Q: 2) (20) Demand for widgets is a linear function of price. If the price of Widgets is set to $20,…

A: "As per our policy, we are providing you with the solution of the first three sub-parts. Kindly…

Q: List and explain the four (4) properties of the indifference curves

A: The indifference curve is the graphical representation of the different combination of two goods…

Q: Convexity & Concavity Consider the function defined by the formula This function is 200 if 0 < x <…

A: Detailed explanation:The function y=f(x) provided is defined piecewise as follows:1. x200 for…

Q: Does a Budget constraint has only one individual indifference curve? Does every isocost line has a…

A: Budget constraint represent the amount or combination of goods that is affordable with the given…

Q: Suppose Maria would spend $1500 per year on travel, even if her annual income were zero. As her…

A: $1500 spending on travel by Maria is known as autonomous spending which is independent of her…

Q: , Draw indifference curves for the following utility functions. a) u(x, y) = x + 2y b) u(x, y) =…

A: Utility Function is a function which relates the amount of the consumption goods and utility derived…

Q: Define indifference map in not more than 2 lines

A: Before getting to the definition of indifference map we must first understand what is indifferent…

Q: a) Formulate the consumer's choice as a constrained optimization problem. b) What are the first…

A: "Since you have asked multiple parts, we will answer only first three parts for you. If you have any…

Q: Question-3 (Finding optimal bundle) utility functions and budget constraints. 1. U (₁, ₂) = 3x₁ +2r2…

A: An optimal bundle is the combination of two goods that provide a consumer with the highest utility…

Q: Is the function v(x1,x2)=x21x32 a monotonic transformation of u(x1,x2) ? Select one: a. No b. Yes

A: A monotonic transformation is a method of transforming a set of numbers into another set while…

Q: For each of the following utility functions (i) derive the equations describing the indifference…

A: Note: As per the guidelines we're only entitled to answer only first three parts of the MCQ type…

Q: s utility function is U=X+ 25XZ + Z. Let the price of good X be px, the price of good Z be…

A: Given utility function- U= X+25XZ+Z

Q: The value in Y axis has changed from 14.94 to 10.98 and the value in X axis has changed from 9.12 to…

A: Change in Y is 3.96 Change in X is 6.83

Q: Consider a consumer who consumes two goods and has utility function u(x1, x2) = x2 + √√√₁. The price…

A: When the price of good changes then the price effect has two parts, one is the substitution effect…

Q: Consider the utility function U(x, y) = xy + x. Which of the following bundles is not on the same…

A: We have to calculate the value of U for all (x,y). The bundle which gives the different result will…

Q: 2. Now consider u(x1, x2) = 2 In xị + In x (a) Find expressions for MU, and MU2. (b) Find an…

A: Marginal Utility (MU) is the extra utility which is derived by the consumption of an additional unit…

Q: Question 1 = Prove that the indifference curves that represent the quasilinear utility function…

A: When a person only purchases up to a particular amount of one of the two items (x1 and x2 that are…

Q: Consider the following equation for an indifference curve: y = 20/x. At point A (2, 10), the MRS is?

A: The indifference curve shows us the consumption of two commodities that are consumed by the consumer…

Q: 1. Prove that MRS = = − ₂ holds when the utility function is U = U (91, 92).

A: 1) Utility maximization is founded on the premise that people and firms should strive to make their…

Q: (2) If a good is normal, then an increase in the price of the good will lead to which of the…

A: We are approached to consider the effect of a price increase on a normal good within a two-good…

Q: Linda loves buying shoes and going out to dance. It costs Linda $50 to buy a new pair of shoes or to…

A: The budget line is the graphical representation of all the possible combinations of two different…

Q: 4. Find the maximum values of the following functions and show whether they are maximized at their…

A: A function achieves its maximum value when it reaches its highest value. The maximum value of a…

Q: The value in Y axis has changed from 13.54 to 11.78 and the value in X axis has changed from 9.96 to…

A: Indifference curve shows combinations of two goods that give same level of utility. Marginal rate of…

Q: What are indifference curves?

A: The utility is a want satisfying power of a commodity. Marginal utility is the additional utility…

Q: ate a table and graphs (a) Suppose we have preferer indifference curve through the bundle X = 30 and…

A: Utility function : U = 10 x2/3 y1/3 Budget Constraint : Px*x + Py*y = M Optimal consumption is…

Q: 1) (15 points) A student has a lunch utility function U(S,P) = 8S + 3P, where S is the number of…

A: The student perceives pizzas and salads based on their utility values. The utility value of a salad…

Q: Consider the following equation for an indifference curve: y = 20/x. At point A (2, 10), the MRS is?

A: Given data: The equation for indifference curve is y=20x Point is A2, 10

Q: Suppose a consumer's utility is given by: u (x1, x2) = a^/x¡ + b/x2 Where a= 8, and b = 4 What is…

A: Marginal utility measures the change in total utility due to additional unit consumption, keeping…

Q: Upon graduating from UT this May, you take on a management position working at UtMax theater. You…

Q: 1. Compute the slope between points B and D. 2. Interpret/Explain descriptively the slope of the…

A: Below is the given values: The monthly budget = Php 600 1. Slope between points B and D =- Change in…

Q: Depict utility function on a number line: U(x)=(x-6)^2 Indifference set around x=3 Lower contour set…

A: U(x) = (x-6)^2

Q: A consumer buys (x1, X2, X3) at price vector (P1, P2 , P3). We make three observations of his…

A: Recall that, A is revealed preferred to B if A is chosen when B is available. Choices satisfy…

Q: 4 Part Question on Caesar * * PART 1 * * Caesar has preferences that are described by the…

A: Well-behaved preferences are monotonic and strictly convex.

Q: Consider a consumer who must allocate their available income between the consumption of two goods,…

A: Marginal utility refers to the additional utility derived from the consumption of one more unit of…

Q: Given the two functions below: Y=10e-0.5q and y=7ln5q Draw the two functions for the interval…

A: The demand function refers to a mathematical representation of the relationship between the quantity…

Q: (g) Show that, if M falls to $1034, with Px = 8 and Py = 5, then this has the same utility as the…

A: From part d: The optimal demand equation for good X is X=2M3Px .....(1) The optimal demand…

Q: An individual has an income of 240 and finds his satisfaction by consuming goods x1 for 2$ and x2…

A: Utility refers to the satisfaction. The aim of consumer is to maximize the utility. Given the…

Q: consumer has set a budget of $600 for the consumption of good X and Y. The price of Good X is $20,…

A: Equilibrium condition: MUx/MUy = Px/Py

Question

Draw an indifference map for each of the following functions.

U(x,y) = x2y3
U (x, y) = 2x + 3y
U (x, y) =x + ln(y)
U (x, y) = min{2x, 3y}
U (x, y) = max{3x, 2y}

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define indifference curve.

VIEW

Step 2: Draw the indifference map.

VIEW

Step 3: Draw the indifference map.

VIEW

Solution

VIEW

Step by step

Solved in 4 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

(b) It is thought that a consumer measures the utility, u(x, y), of possessing a quantity, z, of apples and a quantity, y, of oranges by the formula u(x, y) = rªyla, where a is a constant. Suppose that apples cost p dollars each and oranges q dollars each. If the consumer has M dollars to spend on apples and oranges, use the method of Lagrange multipliers to find the quantity of each that he will buy in terms of a, p, q and M. [You are not required to justify the use of the method of Lagrange multipliers here.] For equally priced apples and oranges when he has one dollar to spend, he is actually observed buying one apple and two oranges. What value of a does this imply?
A consumer has an annual budget constraint for two goods: “housing sq. ft." and "$ for everything else". Draw the budget constraint for this consumer if income (v) = $50,000 and price per sq. ft. of housing, ph, is S200. Please be sure to fully label your graph (i.e., slope, intercept, etc.). Note: plot "housing sq. ft." on the x-axis. How would this consumer's budget line change if she received a $5,000 raise and the price of housing increased to $250? Include a graph with your answer. How did the economic rate of substitution (ERS) between housing and $ for everything else change when pa changed? Please interpret the ERS both before and after the price change.
3. Let there be two goods x and y with prices px and py respectively, and let M be the consumer's income. Let the consumer's preferences be represented by the utility function min(2x, y). Find the consumer's expenditure function. Note: you cannot use the Lagrange method as the utility function is not differentiable - but you have used the min U = utility function before. (4)
Greg has the following utility function: u=2057 20.43. He has an income of $96.00, and he faces these prices: (P1, P2) (9.00, 9.00). Suppose that the price of an increases by $1.00. Calculate the equivalent variation for this price change. =
A consumer buys (X1, X2 , x3 ) at price vector (P1, P2 , P3). We make three observations of his behavior: At (P.P,P,)=(1,1, 2), the consumer chooses (x,,x,,x, ) =(5,19,9) At (P.P,,P.) =(1,1,1), the consumer chooses (x,.x,,x, ) = (12,12,12) At (P,P,,P,)= (1,2,1), the consumer chooses (x,.x,,x, ) =(27,11,1) Does the consumer's behavior satisfy WARP? What about SARP?
A decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph? Select one: OA. Parallel outward shift of the line OB. Parallel inward shift of the line OC. Decrease the horizontal intercept COD. Increase the vertical intercept
Given the utility function 1/2 1/2 U = x₁x₂find a general expression for MRCS in terms of x₁ and x₂.
If the prices for goods A & B are $5 & $12, respectively, and a customer has $200, which basket of goods (A, B) gives her the highest satisfaction that she can afford? (10, 10) (15, 10) (16, 10) We need her indifference curves (preferences) to know. (10, 15)
Question 4: Consider a general utility function U(x₁, x₂). Let's now solve for the optimal bundle generally using the Lagrangian Method. 1. Write down the objective function and constraint in math. 2. Set up the Lagrangian Equation. 3. Fnd the first derivatives. 4. Find the first order conditions. What's the interpretation for >? 5. Rearrange them to get the tangency condition.
given this utility function 95x10.3x20.2x30.25 first the first, second and cross order patial derivative with respect to each of the derivatives x1 x2 x3 what is the total utility derive if x1=24 x2=15 x3=5
Linda loves buying shoes and going out to dance. It costs Linda $50 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $500 to spend on shoes and dancing. 1. What is the equation for her budget line? Draw it with T on the vertical axis and label the slope and intercept.