Consider a market with two goods: good 1 and good 2.Let x1 denote the good 1 consumption and x2 denote the good 2 consumption.Consider a consumer with the following utility function: U(x1,x2) = 7x1+2(x2)0.6What is the marginal utility of good 2 for bundle (8,8)?

Given, U(x1,x2) = 7x1 + 2(x2)0.6 For finding the marginal utility of good 2, we need to…

Answered: What is the marginal utility of good 2…

Business

Economics

What is the marginal utility of good 2 for bundle (8,8)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Suppose, a glass of lemonade (x) sell for 10 taka each and a cupcake (y) cost 60 taka. Total income…

A: U(X,Y) = X0.15Y0.85 where X is a glass of lemonade Y is cupcake Px is the price of a glass of…

Q: Answer the following questions a) Steak and salad for a person who neither like nor dislike…

A: If a commodity is a “good” then the fundamental principle of ‘more is better’ follows. The…

Q: 1 Marginal utility and marginal rate of substitution Suppose an individual who derives utility u(x,…

Q: Total utility is 0 when marginal utility is 0 True/False

A: # Utility is a concept which helps us calculate the satisfaction a consumer gets when a good or…

Q: Laura has an income of 100 and she has to spend it to buy daisies (x₁) and daffodils(x₂). Her…

A: Utility refers to the happiness or satisfaction that an individual get from the consumption of a…

Q: Lorelai's choice behavior can be represented by the utility function u(x₁, x₂) = 0.9ln(x₁) + 0.1x2.…

Q: 3. Consumer Optimization Utility Function: U = In (x) + 2*In (y) Budget Constraint: 50 = x + 2y Find…

A: A budget constraint addresses every one of the mixes of goods and services that a buyer might buy…

Q: 6. Suppose that a fast-food junkie derives utility from three goods - softdrinks (x), 0.5 0.5…

A: Given, Utility Function: U(x,y,z)=x0.5y0.5(1+z)0.5 px=0.25py=1pz=2 Income (M) = 2

Q: Q1: (I)Asma eats only apples and almonds. Her level of income is $36, Price of apple (Pa) is $2 per…

A: We have the following information related to the question:

Q: Number of Cinema Tickets Total Utility MU/P for Cinema Tickets Marginal Utility Price of a Cinema…

A: The consumer equilibrium shows the maximization of the satisfaction of the consumer by spending his…

Q: Suppose that the consumer maximizes his utilitysuch that the marginal utilities of goods X and Y…

A: Concept Individuals and businesses use utility maximisation as a strategy to get the most…

Q: Imagine you have a movie streaming platform that offers new movies at the time of release. Your…

A: Marginal utility is the additional utility derived from consuming an additional unit of the good.

Q: Henry's utility function is u(x,y)=max{x+3y,3x+y}. (a) Suppose Henry's current consumption bundle is…

A: An indifference curve is a graphical representation used in microeconomics to illustrate a…

Q: Good X costs $8 and good Y costs $4 per unit. His utility function is U = 4.5XY. (a) Calculate Moe's…

A: here we calculate the Moes's utility maximizing purchases of X and Y and constrained utility maximum…

Q: A consumer who maximizes utility enjoys eating free hot dogs. Calculate the consumer's marginal…

A: Marginal Utility is the additional satisfaction derived by the consumption of one more unit of given…

Q: Caleb has an income of $100 and a utility function u(x.y) 2x 4y. Say that the price of x is $4 and…

A: Utility is maximised at a point where marginal rate of substitution is equal to the price ratio of…

Q: Consider the utility function U(r, g) = r+ Iny. (a) Find the marginal rate of substitution, MRS of…

A: The marginal rate of substitution (MRS) is the amount of a good that a consumer is willing to…

Q: A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility yielded by…

A: Marginal Utility (t) = Total utility (t) - Total Utility (t-1) Marginal utility per $ (t) = Marginal…

Q: Law of equi marginal utility is an important law of cardinal utility analysis. Explain this law with…

A: Cardinal Utility analysis is one of the oldest demand theory. It explains the law of demand that…

Q: Abigail, Bernard, Cornwallis, and Douglas each derive a distinct amount of utility from consuming…

A: Utility theory is a positive theory. that looks to make sense of the people's noticed way of…

Q: Consider the following utility function. U=U(X,Y)=X0.2Y0.8 Find the marginal utilities.…

A: Utilty is defined as the satisfaction which the consumer gets by consuming the homogeneous units of…

Q: commodity. In other words, It is the utility derived from each additional unit. Marginal Utility…

A: Option A Marginal Utility It is the change in total utility which is attained when an additional…

Q: Question 7 You are currently at the bundle (x, y) = (4, 2) with a utility function U = ln(x) +…

A: PLEASE FIND THE ANSWER BELOW.

Q: 3.11. Consider a consumer who is demanding goods 1 and 2. When the price of the goods are (2, 4), he…

A: Demand: It refers to the things that people consume. The increase in demand makes the increase in…

Q: c) The consumers utility function is given by U(X,Y)= 5X + 3Y and the given bundle is X = 6 and Y =…

A: Given:The consumer's utility function is U(X,Y)=5X+3Y. The given bundle is X=6 and Y=10.To…

Q: Consider the utility function U(x, y) = xy + x. Which of the following bundles is not on the same…

A: We have to calculate the value of U for all (x,y). The bundle which gives the different result will…

Q: (2) Consider the utility function u(x, y) = Vx+ay. Your budget constraint is P1x+p2y = М. (a) Find…

A: Since you have not mentioned which question you require an answer for, as per our standard procedure…

Q: how to calculate indirect utility function for two goods, al and a2? Given that U(a1,a2) = a1 +…

A: Utility function refers to the function that gives the magnitude of satisfaction that a consumer…

Q: Question 8 Total Utility Oranges Marginal Utility Total Utility Oranges Marginal Utility Lemons…

A: Marginal utility refers to an additional utility with one more unit of good or service consumed.

Q: Utility functions are simply mathematical representations of preferences. (a) True (b) False

A: Utility is defined as the total amount of satisfaction received by an individual by consumping a…

Q: Slices of Pizza Total Utility 50 Marginal Utility 21 90 3\ 120 4. 5. 130 137 120 5) In the above…

A: Utility is the wants satisfying power of a commodity ,and Marginal utility is when more or more…

Q: Assume the utility U of a pair of goods x and y can be determined by U(x, y) = 4xy. Furthermore,…

A: Given Information U = 4xyBudget constraint x2 + y2 = 1

Q: Is it possible for marginal utility to be negative while total utility is positive

A: The total utility (TU) can be understood as the total satisfaction that is derived from consumption…

Q: The utility of a consumer derives from consuming the two goods X and Y can be assumed to be…

A: Let us consider that X and Y represents the consumption level of good X and good Y respectively.…

Q: 3) For each utility function, determine the marginal utility with respect to x, marginal utility…

A: A utility function in economics is a mathematical representation of a consumer's preferences or…

Q: If the marginal utility from consuming the sixth unit of a product is 8 and the total utility from…

A: The total utility is the total satisfaction received by consuming the goods and services. The…

Q: Multiple Choice 15. 10

A: Utility is a measure of the satisfaction derived from consuming some good or service. Marginal…

Q: 5. Find the optimal bundle using the following utility functions and budget constraints. 1. U(x,…

A: To find the optimal bundle, one need to equate the ratio of utility of two goods to the ratio of…

Q: Kate’s utility function includes coffee (c) and sugar (s). She only consumes coffee and sugar…

A: When a consumer consume a good, they drive utility from it. The amount of change in utility gain…

Q: 4 Part Question on Caesar * * PART 1 * * Caesar has preferences that are described by the…

A: Well-behaved preferences are monotonic and strictly convex.

Q: At last time you have answered my question ,but I still have some problems want to ask you and there…

A: To understand the concepts of the Indifference Curve and Budget Line, let us first understand the…

Q: You consume music (M) and concert tickets (C). Your utility function is U(M, C) = M1/4C3/4. The…

A: A consumer maximizes her or her utility given his or her budget constraint at the point where the…

Q: An individual values two goods, X and Y, according to the following utility function 1.14 U(X,Y)=3…

A: Given Consumer utility function: U(X,Y)=30.25X-0.88+0.75Y-0.88-1.14 Price of good X (Px)=3 Price…

Q: As consumer has more and more units of a goods, its marginal utility to him (a) Declines (b) Rises…

A: # Marginal utility is the satisfaction derived from the consumption of an additional unit of a good…

Q: 1. Find the MRS (marginal rate of substitution) for the following Utility functions: 1. U(x, y)= 2.…

A: INTRODUCTION: The marginal rate of substitution (MRS) is the quantity of one good that a consumer…

Q: 3. Consider the following utility function: U = 5 x1 + 2 x2 Also consider the following bundles:…

A: Total utility:Total utility is the sum total of the utility or satisfaction that is derived from the…

Question

Consider a market with two goods: good 1 and good 2.
Let x1 denote the good 1 consumption and x2 denote the good 2 consumption.
Consider a consumer with the following utility function: U(x1,x2) = 7x1+2(x2)0.6
What is the marginal utility of good 2 for bundle (8,8)?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 MARGINAL UTILITY

VIEW

Step 2 ANSWER

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What would happen to the utility maximising bundle due to income decreasing... (ceteris paribus) ?
8
n individual is given $10 to be spent on either oranges or apples. Price of an apple is $ 1 and price of an orange is $2. The marginal utilities derived from each product are as follows: USE BLANK COLUMNS AS NEEDED. 2 # units MU of apple MU of orange 1 60 150 2 50 140 3 40 120 4 30 100 5 20 80 6 10 70 7 5 50 8 0 20 a) The combination that maximizes total utility is: number of apples number of oranges b) If oranges price decreased to $1each and apples still cost $1 each. Given $10 of budget. The combination that maximizes total utility is: number of apples c) Draw the demand curve for oranges number of oranges
1. Jan has the following utility function for broccoli: U(B) = 54B - 0.5B³ a) What is Jan's marginal utility function?
If the total utilities for the fifth and sixth units of a good consumed are 98 and 115 respectively. The marginal utility for the sixth unit is:
Typed and correct answer please. I will rate accordingly. Please do it correct. Most impo
1. For each of the three utility functions below, find the substitution effect, the income effect, and the total effect that result when prices change from p = (2,1) to p' = (2,4). Assume the consumer has income I = 20. (a) Before doing any calculation, make an educated guess about the relative magnitude of the three substitution effects and the three income effects to be found below. (b) u(x1, x2) = x1 + x2. (c) u(x1, x2) = x1x2. (d) u(x1,x2) = min {x1,x2). (e) Rank the substitution effects and the income effects found above by their magnitude. To what extent do they conform to your guess?
solutions. Question 1 Calculating MRS for CD Utility Functions (a) If a consumer has a CD utility function 0.4 0.6 U(91,92) = 994926, calculate MRS1,2. (b) If a consumer has a CD utility function Ima kdown1 calculate MRS1,2. (c) If a consumer has an utility function noltan asd Tor sympy ,1-α U(91,92) = 91 92 llib et (.) orde (hing aid tol bholup U(91,92) = a ln(91) + (1 - a) ln(92), diw sonuanos of calculate MRS1,2. Is it the same as the result in the previous part? (Note: Recall that we discussed the concept of ordinal utility in class, which means only the order of utility matters, not its magnitude. In function is a monotone transformation on the CD utility function. Notice that In (qq) = a ln(9₁) + (1 - a) ln(92). This example verifies that a monotone transformation does not change *(S) sidshav the consumer's indifference curves.) wobei/ (d)
Use the table below to answer the following question. Number of Units A) 95 B) 47.5 190 (D) 90 1 2 3 4 5 5 What is the marginal utility of the second unit? Total Utility 100 190 270 340 400 450
4.
E2
A utility function is given as U = √MB where B represents the quantity of books consumed and M represents magazines. This uülity is shown via indifference curves in the diagram to the right. Holding the number of magazines constant at 20 units, as we increase our consumption of books from 5 units to 10 to 15 and to 20 units, marginal utility with respect to books. is CIES Magazines (Y) 50- 45 40 35 30 25- 20- 15- 10- 5 0- 10 15 RSTV a quie 10 15 20 25 30 35 40 Books (X) 45 5 eboo SCOR scor scor score score