There are two goods in an economy: apples (a) and bananas (b). Price of an apple is $1 and price of a banana is $2. Your income is $10. Suppose your utility function is u(a, b) = 2a2 b+5 a. (8 points) How many apples and bananas will you consume? b. (4 points) Are a and b normal or inferior goods? c. (4 points) Are a and b substitutes or complements? d. (4 points) Draw the Engel curve for apples for the income levels ranging from $10, $20, $30 and so on.

2. Vibha consumes three goods X, (shirts), X, (food in pounds), and X, (shelter in square feet). Vibha's utility function is given by: U (X,, X, X,) = 5ln Xt 3ln X + 2ln X, where In (x) or log. (x) is the natural logarithm. Vibha's weekly income is $100. Let the price of X, = P, = $10, the price of X, = P, = $2, and the price of X, = P; = $4. What is the equation for Vibha's budget constraint? а. b. |How many shirts, pounds of food, and square feet of shelter, will Vibha consume, as a rational consumer?

The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is 20 then the marginal utility of good "b" must be ________ to have an optimum combination of goods purchased. 80 20 60 4

12) Leyla consumes goods X and Y. The price of good X is Px and the price of good Y isPy, Leyla’s income is I. If both prices and Leyla’s income increases by 50%, then theA) budget constraint will be unchanged.B) slope of the budget constraint will increase.C) slope of the budget constraint will decrease.D) budget constraint will shift outward in a parallel fashion.E) None of the above .

Parts d-h please!

Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is €2 per pound, the price of oranges is €3 per pound, and Bob's budget is $24 per week. What is Bob's utility maximizing choice between these two goods? A. 12 pounds of apples and no oranges B. 8 pounds of oranges and no apples C. 4 pounds of oranges and 6 pounds of apples D. 12 pounds of oranges and no apples Fiona uses her entire budget to purchase food and clothing. The price of food is €1 per unit and the price of clothing is €2 per unit. Fiona's marginal utility from food is 2 and her marginal utility from clothing is 6. She currently spends all her money on food and clothing. Her objective is to maximise her utility. Which of the following statements is correct? Fiona should buy more food and more clothing. A. B. C. D. E. Fiona is currently maximsing her utility and should continue to consume her current…

A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.