Suppose that MU, / Px exceeds MU,/ Py To maximize the utility, consumer who is exhausting her money income should buy Lütfen birini seçin: O A. less of X and less of Y O B. more of Y and/or less of X. O C. more of X and/or less of Y. O D. more of Y only if its prices rise. O E. less of X only if its prices rise.

Which of the following correctly defines compensating variation? O The difference in the price a consumer is willing to pay and the price the consumer actually pays. The amount of income that a consumer requires to compensate them for a lower quality product. O The amount of income that must be given or taken away from a consumer to keep their purchasing power constant after a price change. O The amount of income that must be given or taken away from a consumer after a change in price, such that their welfare after the price change is the same as it was before the price change. O The amount of income that must be given or taken away from a consumer before a change in price, such that their welfare before the price change is the same as it will be after the price change. O No answer.

You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table.    Units of X MUx Units of Y MUy 1 10 1 8 2 8 2 7 3 6 3 6 4 4 4 5 5 3 5 4 6 2 6 3 a. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility?     ______units of X and ______units of Y   b. What total utility will you realize?  ______utils c. Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? _____units of X and ______units of Y d. Using the two prices and quantities for X, complete the table to derive the demand schedule (a table showing prices and quantities demanded) for X. Instructions: Start with the highest price first Price of X Quantity Demanded of X $    $

Modou has a utility function U(X1,X2) = 2X1 + X2. The prices of X1 & X2 are $1 each and Modou has an income of $20. H ow much X1 and X2 does Modou consume? a. X1 = 10 units and X2 = 10 units Ob. X1 = 10 units and X2 = 0 %3D O c. X1 = 20 units and X2 = 0 O d.X1 = 0 and X2 = 20 units