If U = f(x, y) is the utility function for goods X and Y, the marginal utility of X is au/ax and the marginal utility of Y is au/ay. (a) If U = 8x²y2, find the marginal utility of X. au ax = (b) If U = 8x2y2, find the marginal utility of Y. au ду
Q: Suppose Ed's utility from the consumption of martinis (m) is proportional to the number he drinks:…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Consider the graph below. Assume that, initially, an economy has long-run aggregate supply…
A: The aggregate demand is the total demand for goods and services at the existing price level in the…
Q: nsider the figure to the right. At point A, the A. marginal change in price associated with a given…
A: The demand curve shows an inverse relationship between price and quantity demanded. Demand is a…
Q: 1 2 Questions on Monetary Policy If the required reserve ratio is 15%, how much is the money…
A: The first question is asking for the calculation of the money multiplier given a required reserve…
Q: Consider the following game in strategic (normal) form: P1 U M D L 2,2 1,5 2,0 M1 3,1 1,6 0,-1 P₂ M2…
A: There are two players : P1 & P2Strategy Set of P1 = { U, M , D }Strategy Set of P3 : { L , M…
Q: 14. (Continuing with the situation described in the preceding question.) Consider the model of a…
A: Labor economics is crucial as it explores the allocation, usage, and remuneration of human capital…
Q: What will happen to Demand(D), Supply(S), new Equilibrium Price(P*), and new Equilibrium…
A: The objective of the question is to analyze the impact of certain events on the demand, supply,…
Q: The government sets a minimum wage above the current equilibrium wage. What effect does the minimum…
A: The minimum wage law is a price control method by the government. it is the minimum amount of…
Q: ● 1. The table below lists 4 observations of price (Px) and quantity (Qx) for a product X, their…
A: The coefficient of determination is also known as R value. The R value shows the variance in the…
Q: Thailand uses labor, along with capital and natural resources to produce two products: textiles…
A: Production Possibility Curve(PPC) shows the potential GDP of an economy reflecting the various…
Q: Price 8 7 6 5 IX 4 3 2 330 550 1 0 110 220 440 660 Quantity per month 770 880 D S -(935, 0.5 990…
A: Here we have to find out the effect of change in demand and supply in Mandarin Orange market.Demand…
Q: Suppose the celery industry is competitive. The (inverse) market demand schedule is: p=1000.1QD The…
A: Competitive market refers to market where large number of buyer and seller exist in the market.…
Q: Asap Suppose that Shen, an economist from a research facility in Washington, and Valerie, another…
A: Economists are basically those professionals who study and dissect economic frameworks, ways of…
Q: The following graph shows the short-run supply curve for pecans. Place the orange line (square…
A: The supply curve is the supply function that is plotted on the graph. It shows the different…
Q: At the end of 7 years, I want to have 9000 in my bank account to buy a motorcycle. How much to…
A: The time value of money means the value of money in present time is worth more compared to the the…
Q: 2.13. Find the equilibrium price and quantity for two complementary goods, slacks (S) and jackets…
A: The objective of the question is to find the equilibrium price and quantity for two complementary…
Q: What is the amount of the quarterly deposits A such that you will be able to withdraw the amounts…
A: The objective of the question is to calculate the amount of the quarterly deposits A that will allow…
Q: 5. The accompanying table shows the supply and demand schedules for used copies of the fifth edition…
A: The demand curve shows the willingness to buy or consume a particular good sold or produced in the…
Q: Using the table below and a benchmark year of 1992, what is the output index for 1988? YEAR 1988…
A: The output index measures the total changes in the output of particular goods and services within an…
Q: Select all that apply A production function can include many inputs. Which of the following are the…
A: The inputs such as capital, labor and land are used to produce and output in the market is known as…
Q: Tamika is lending Juan $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they…
A: The interest rate is the fee of borrowing cash or the go back on investment expressed as a percent…
Q: 0 45° Real GDP, Y (trillions of dollars) How does the economy adjust if the economy is initially at…
A: The equilibrium occurs where the demand and supply forces are equal. The expenditure is key…
Q: A material supplier won a 7-year contract to supply a construction company with all their building…
A: First-year profit is equal to $12,000The annual profit is expected to increase by $7000 each…
Q: Using the graph, complete the table that follows by indicating whether each statement is true or…
A: The elasticity of demand measures the quantitative relationship between the demand and it's…
Q: The government can overcome the asymmetric information problem regarding pollution abatement by…
A: Asymmetric information implies a condition in which one party involved in a transaction possesses…
Q: Consider the market of monopolistic competition. Which of the following options is correct in the…
A: There are many sellers, however, the products produced by each seller are different. The products…
Q: Suppose that is a normal good and y is an inferior good. The Marshallian deman functions for these…
A: The Marshallian demand function, named after the economist Alfred Marshall, is a basic idea in…
Q: GDP and inflation: Consider an economy that produces and consumes haircuts and cars. The next table…
A: Nominal GDP: This is calculated by multiplying the quantity of each good or service produced by its…
Q: Consumption and Saving
A: "consumption" refers to the portion of Christina's earnings that she spends on items and offerings…
Q: Suppose a country trades with three countries: Brazil (20% of trade), China (45%), and France (35%).…
A: A number that compares a currency's value to a range of other currencies is known as the effective…
Q: Which direction would the market demand curve shift if Tex withdrew from the market? What if Dex…
A: Change in quantity demanded vs change in demand When there is a change in the price of a product…
Q: Marvin has a Cobb-Douglas utility function, U=91 0.5 0.5 his income is Y = $900, and initially he…
A: Consumer surplus. compensating variation and equivalent variation are the measures of consumer…
Q: For demand: P = 250 - 5Q , at what price does the elasticity of demand equal -4?
A: Demand is the desire backed by a willingness to pay and the ability to pay by an individual. The…
Q: Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity…
A: The elasticity of demand(Ed) measures the responsiveness of quantity(Q) demanded to a change in…
Q: An indifference curve that has a higher level of utility will be of an indifference curve with a…
A: This can be described as the concept that provides the graphical representation of the combination…
Q: COST PER UNIT $ отх Y Z OUTPUT According to the diagram above, output OY represents the firm's:…
A: LRATC stands for Long-Run Average Total Cost. It refers to the average total cost per unit of output…
Q: What is the equivalent annual cost in years 1 through 9.00 of a contract that has a first cost of…
A: Present value is the current value of future cash flows or payments. It is the discounted value of…
Q: c. Consider the demand for wheat illustrate the following scenario: A gluten free (wheat free) diet…
A: The desire of an individual to buy a product according to the willingness and ability to purchase a…
Q: PRICE LEVEL 120 110 100 LRAS Q REAL GOP In the short run, the price level is Natural Real GDP SRAS…
A: Economic analysis is the process of evaluating data and trends in order to better comprehend…
Q: In the following table, select the amount of each good that each country exports and imports in the…
A: Comparative advantage theory: It was introduced by David Ricardo in 1817. It is an updated version…
Q: An indifference curve that has a higher level of utility will be of an indifference curve with a…
A: This can be described as the concept that provides the graphical representation of the combination…
Q: marginal decision making
A: Marginal selection-making refers to creating picks based totally on the extra benefits or costs of…
Q: The figure below depicts the economy of Altrua, which is presently in equilibrium. Enter your…
A: Gross domestic product is the final combination of goods and services in a country. GDP is an…
Q: What does this example show us about the failed attempt at 'collusive pricing arrangement' due to…
A: Rival companies fighting for market share are examples of competition in the business world.…
Q: What are the influences on buying plans that change demand, and do these influences increase or…
A: Real Gross Domestic Product (Real GDP) is a measure of the total value of all goods and services…
Q: 5 A bank has $210,000 in excess reserves and the required reserve ratio is 25 percent. This means…
A: The first part of the question is asking for the total reserves a bank could have given that it has…
Q: The cross-price elasticity of demand measures how responsive the: demand for one good is to a change…
A: The quantity demanded of a good or service and its price movements can be measured by using…
Q: A. An individual makes $235,000 in a year. What is their marginal tax rate?
A: Marginal tax rate is the taxation system under which the rate of tax increases with the increase in…
Q: Refer to Scenario 1 . If all theatres are closed due to the Covid restrictions, you would expect…
A: The question is asking us to predict the economic impact of all movie theaters being closed due to…
Q: Sketch a marginal cost curve for a firm that has constant marginal costs of production up to its…
A: Marginal Cost: It is the additional cost incurred by producing one more unit of output. It is…
Step by step
Solved in 3 steps
- U(x, y) = xayb A consumer maximises utility subject to a budget constraint M = Pxx+Pyy Where px is the price of good x, py is the price of good y and M is the budget available. a. Derive an expression for the marginal utility of x. Under what condition is the marginal utility diminishing. b. Derive an expression for the marginal utility of y. Under what condition is the marginal utility diminishing.For each of the following utility functions get the marginal utility of consumption of each of the goods. 1/2 1/2 (a) u(a,b) = a b (b) u(x, y) = x³/4y1/4 (c) u(a, b) = n(a) + In(x) (d) u(x, y) = ln(x) + ln(y) (e) u(a, b) = 2xa +XbIf the utility function of an individual takes the form: U = U ( x 1, x2) = (x1 + 2) 2 (x2 + 3) 3 Where U is total utility, and x1 and x2 are the quantities of two commoditiies consumed: (a) Find the marginal-utility function of each of the two commodities (b) Find the value of the marginal utility of the first commodity when 3 units of each commodity are consumed.
- Biwei’s utility function U=4XY, where X is consumption of beer and Y is consumption of pizza. For this utility function, the marginal utility of X is MUx = 4Y; the marginal utility of Y is MUY = 4X. 1) Suppose Y = 3. Calculate Biwei’s utility for X = 2, 3, 10, and 11. For a given level of Y, does good X display diminishing marginal utility? 2) Suppose X = 3. Calculate Biwei’s utility for Y = 2, 3, 10, and 11. For a given level of X, does good Y display diminishing marginal utility?The utility of a consumer derives from consuming the two goods X and Y can be assumed to be determined by the utility functionU(X,Y)= 4X03Y05. If good X costs 10 birr a unit and good Y costs 15 birr a unit and the consumer's income is 120 birr. What combination of X and Y that will maximize utility?You consume music (M) and concert tickets (C). Your utility function is U(M, C) = M1/4C3/4. The marginal utility for concert tickets, MUC is MUC =3/4C-1/2M1/4 and the marginal utility for music, MUM is MUm = 1/4C3/4M-3/4 (a) Calculate MRSMC using only the given marginal utilities. (b) Solve for the utility of bundle A where M = 16 and C = 16. Solve for your utility at bundle B where M = 128 and C = 8. Are the utilities the same? (c) Calculate MRSMC at bundle A and at bundle B. Are they the same? (d) Are your indifference curves convex? Draw the ICs. Make sure to label the quantities of the consumption bundles, the axis, and the MRS at those bundles.
- compute the marginal utility of good X (MUX) and the marginal utility of good Y (MUY).b. U=U ( X ,Y )=X0.5Y0.41 Consider a consumer who consumes only two goods, 21 and z2. His utility function is u (21, 22) = In z1 + 2. where In represents the natural logarithm. 1.a Derive the consumer's MRS of good 1 for good 2 using calculus to calculate his marginal utility from z and his marginal utility from z2. 1.b If the price of z1 is $2 per unit and the price of z2 is $4 per unit, and the consumer's income is $100, What is the equation of this consumer's budget line? 1.c What are the optimal consumption choices, z and z5, for this consumer? Show your work.True/ False Marginal utility decline with the increase in the unit of consumption of a good.
- Question 2 David spends his budget on chocolate and chip. His utility function is given by ?(?1,?2)= 2?1?2, where ?1 is the number of chocolates he consumers per week, and ?2 is the number of chips he buys per week. A chocolate costs 10 SEK, and a chip costs 20 SEK. David’s weekly budge for consuming on these two goods is 120 SEK. (1) What is David’s budge line? Draw the budget line on a graph with chocolate amounts on the horizontal axis and chip amounts on the vertical axis. Write explicitly at which points budget line crosses the axis. (2) What is David’s marginal utilities for the two goods, respectively? What is his marginal rate of substitution between the two goods? (3) What is David’s optimal choice? Calculate the numerical answer for the optimal bundle. Also draw an indifference curve for David on the same graph as question(1) and show the optimal bundle.Suppose that the price of good X is $6 and the price of good Y is $2. You have $144 to spend and your preferences over X and Y are defined as: U(x,y) = x2/3y1/3 Calculate the marginal utility of X Calculate the Marginal Utility of Y What is the optimal Choice of X and Y given the PX = $6, PY = $2 and I = $144 If Income is increased to $150 calculate how the optimal choice of X and Y changeTrue/False Marginal utility keeps falling with the each additional consumption of a good or service.
