QUESTION 12The consumer's utility function is the following: U=x+4x0912X =The consumer's optimal values of x and x2 are the given by the following: x1IP3.6P13.6P1211-0.911-0.9P1PPP223.6P0.93.6P111The compensated demand equations for x, and x, are the following: x = U-41-0.91-0.9=12lcP2cP22Assume the prices are the following: P=4, P=6, I=100000, and the P, that makes x =0 is P=4.422.1211What is the consumer surplus?

Consumer's utility function:Consumer's optimal values:Compensated demand equations:Prices and…

QUESTION 12 The consumer's utility function is the following: U=x+4x09 P I 3.6P 3.6P 1 1 The consumer's optimal values of x and x are the given by the following: x = 2 x, x2 1 1 1-0.9 1-0.9 x= P P 1 P P 2 2 3.6P 0.9 3.6P 1 1 The compensated demand equations for x, and x are the following: x = U-4 1-0.9 1-0.9 = 1 2 lc P 20 P 2 2 Assume the prices are the following: P =4, P =6, I=100000, and the P, that makes x =0 is P =4.422. 1 2 1 1h What is the consumer surplus?

QUESTION 12 The consumer's utility function is the following: U=x+4x09 P I 3.6P 3.6P 1 1 The consumer's optimal values of x and x are the given by the following: x = 2 x, x2 1 1 1-0.9 1-0.9 x= P P 1 P P 2 2 3.6P 0.9 3.6P 1 1 The compensated demand equations for x, and x are the following: x = U-4 1-0.9 1-0.9 = 1 2 lc P 20 P 2 2 Assume the prices are the following: P =4, P =6, I=100000, and the P, that makes x =0 is P =4.422. 1 2 1 1h What is the consumer surplus?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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