Ques 1. Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY². The marginal utility of X and marginal utility of Y are given by the following equations: MUX-3Y² and MUY=6XY The current market price for X is $10, while the market price for Y is $5. Sally's current income is $500. a) Draw out Sally's budget line. (show the points where it meets the vertical and horizontal axes) b) Determine the X,Y combination which maximizes Sally's utility, given her budget constraint. (Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the equal marginal principle to find the optimal ratio of X to Y and then use that in the budget equation] c) How much is Sally's utility? d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?
Ques 1. Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY². The marginal utility of X and marginal utility of Y are given by the following equations: MUX-3Y² and MUY=6XY The current market price for X is $10, while the market price for Y is $5. Sally's current income is $500. a) Draw out Sally's budget line. (show the points where it meets the vertical and horizontal axes) b) Determine the X,Y combination which maximizes Sally's utility, given her budget constraint. (Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the equal marginal principle to find the optimal ratio of X to Y and then use that in the budget equation] c) How much is Sally's utility? d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?
Chapter1: Making Economics Decisions
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Ques 1.
Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY².
The marginal utility of X and marginal utility of Y are given by the following equations:
MUX-3Y2 and MUY=6XY
Share
The current market price for X is $10, while the market price for Y is $5. Sally's current income
is $500.
a)
Draw out Sally's budget line. (show the points where it meets the vertical and horizontal
axes)
b)
W
Dictate
Determine the X,Y combination which maximizes Sally's utility, given her budget constraint.
(Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the
equal marginal principle to find the optimal ratio of X to Y and then use that in the budget
equation]
Wed Oct 12 2:22 PM
c)
How much is Sally's utility?
d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?
Ques 2.
X
The domestic demand for wheat is QDD = 1000-25P, and
the export demand is QDE = 500 - 25P.
Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and the
kink point.
P
Comments
Editor
Ques 3.
#Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let unit
Page 1 of 1 358 words
English (United States)
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E =
+ 162%
%D
tled folder
reen Shot
10...5.57 PM
PDF
Issant Q's -
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Transcribed Image Text:Word File Edit View Insert Format Tools Table
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V
Review Session 4.m... ›)
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IUCN IUCN Red List of Thr...
BIŲ X² X₂
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W= Assignment 2 Fall 2022
References
Aa ✓
Dv
A
A
66
Mailings >> Tell me
2= ¹2
A↓
A
A
Styles
Ques 1.
Sally consumes two goods, X and Y. Her utility function is given by the expression U=3XY².
The marginal utility of X and marginal utility of Y are given by the following equations:
MUX-3Y2 and MUY=6XY
Share
The current market price for X is $10, while the market price for Y is $5. Sally's current income
is $500.
a)
Draw out Sally's budget line. (show the points where it meets the vertical and horizontal
axes)
b)
W
Dictate
Determine the X,Y combination which maximizes Sally's utility, given her budget constraint.
(Partial units for the quantities are possible.) [Hint: One of the ways to do this is to use the
equal marginal principle to find the optimal ratio of X to Y and then use that in the budget
equation]
Wed Oct 12 2:22 PM
c)
How much is Sally's utility?
d) Now the price of X increases to $15. What is the ratio in which she will consume X and Y ?
Ques 2.
X
The domestic demand for wheat is QDD = 1000-25P, and
the export demand is QDE = 500 - 25P.
Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and the
kink point.
P
Comments
Editor
Ques 3.
#Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let unit
Page 1 of 1 358 words
English (United States)
Focus
E =
+ 162%
%D
tled folder
reen Shot
10...5.57 PM
PDF
Issant Q's -
4...Docs.pdf
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