Jane's utility function is U(q, q2) qi+q2. The price of each good is $1, and her monthly income is $2,000. Her firm wants her to relocate to another city where the price of qz is $2, but the price of qi and her income remain constant. Please calculate her equivalent variation and he compensating variation.

Subpart 4,5,6 only.

Consider the following indirect utility function: V(p,I) = II,( Pi where E-1 a; = 1, and a; + 0 , Vi 1. What's the demand function for x;? (Hint: Take logarithm to both sides of the equation) 2. What's the original utility function? (Hint: If n is too abstract, let n = = 2)

PROBLEM 2 – Uncompensated and Compensated Demand Functions, Price Elasticities of Demand, and Expenditure Functions Susi enjoys her favorite drink (D) and food (F) which she always spends her monthly income on those goods. Her average allocated income spent on drink and food is Rp 3 million, and the current prices of drink and food are Rp 30k and Rp 90k, respectively. Suppose her happiness by consuming those goods can be capture by the utility function as follows: *see image* a. What are her uncompensated (Marshallian) demand functions for drink and food, and calculate how many drinks and food that she currently consumes? Draw and describe how her demand curves for drink and food are shifted by changes in her income or the price of the other good. (hint: Use Lagrangian method). b. If the price of drink increases to Rp 50k, calculate the price elasticity of demand for drink. c. What is her the expenditure function for drink and food? Use the expenditure function to compute the…

Suppose Melina's utility for goods X and Y is represented by the following utility function: U(X,Y) = X1/4Y3/4. Find Melina's marginal rate of substition

A consumer has a utility function U(X,Y ) = X1/2 Y1/2 . Prices of the goods are pX = £10 and pY = £5, respectively, and the consumer has income M = £200 to spend on X and Y. Currently, she buys 2 units of good X and spends the rest of her income on good Y.a) Determine this consumer’s current utility level. b) Compute the consumer’s marginal utilities of goods X and Y. c) Explain why the consumer’s current consumption of goods X and Y is not optimal. Should she substitute X for Y or vice versa? The consumer’s marginal rate of substitution is MRS = Y/X.d) Determine this consumer’s optimal consumption of both goods. e) By how much does the consumer’s utility increase when she consumes the optimal bundle?

You go to the store in search of laundry detergent, to discover that they offer two varieties: Myst and Breez. Your preferences between Myst and Breez can be represented by the following utility function: U(M. B) = 16M + 32B Myst costs 4$ unit. Breez costs 10$ per unit for the first 5 units, but all units after 5 only costs $6. Find your Engel Curve for Breez.

(2) Lisa can buy either whole chickens or chicken wings at her local supermarket. Her utility function over whole chickens and chicken wings is U(xc,Xw) = 2xc + Xw, where x, and xw are chickens and chicken wings, respectively. What is her demand function xc (pc, Pw, m) for chickens?

Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers (C). Her market research has found that consumer demand for this product can beexpressed as a function of the price of the charger itself (PC), the price of phones (PF), andthe consmer’s income (I). Consumer demand can be described by the function C(PC, PF, I) =(i−10PC)/ (PF) Suppose her chargers come in all different capacities to meet any quantity demanded, so youdon’t need to worry about restricting C to whole numbers for this problem. (a) Does this product satisfy the law of demand?Explain.

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