EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 14, Problem 14.2P
a
To determine
To plot:Graphical representation of indifference curve map.
b)
To determine
To show: When rate of interest
c)
To determine
To show: When
d)
To determine
To ascertain: The relation between saving behavior and impatience.
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QUESTION 1
Qx0.65Qy(1-0.65) and the budget 127 = 6Qx + 6Qy find the CHANGE in optimal consumption of Y if the price of X increases by a factor of
For the utility function U =
1.8.
Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
For the utility function U = Qx0.31 (1-0.31) and the budget 114 = 9Qx+8Qy find the CHANGE in optimal consumption of Y if the price of X
increases by a factor of 2.0.
Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
For the utility function U = Qx0.46Qy(1-0.46) and the budget 100 = 11Qx + 11Qy find the CHANGE in optimal consumption of X if the price of X increases by a factor of 1.5.
Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
Chapter 14 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 14.3 - Prob. 1MQCh. 14.3 - Prob. 2MQCh. 14.4 - Prob. 1MQCh. 14.4 - Prob. 1TTACh. 14.4 - Prob. 2TTACh. 14.5 - Prob. 1TTACh. 14.5 - Prob. 2TTACh. 14.5 - Prob. 1MQCh. 14.6 - Prob. 1TTACh. 14.6 - Prob. 2TTA
Ch. 14.6 - Prob. 1MQCh. 14.6 - Prob. 2MQCh. 14.6 - Prob. 1.1TTACh. 14.6 - Prob. 2.1TTACh. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 14.1PCh. 14 - Prob. 14.2PCh. 14 - Prob. 14.3PCh. 14 - Prob. 14.4PCh. 14 - Prob. 14.5PCh. 14 - Prob. 14.6PCh. 14 - Prob. 14.7PCh. 14 - Prob. 14.8PCh. 14 - Prob. 14.9PCh. 14 - Prob. 14.10P
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- QUESTION 1 0.68Qy(1-0.68) and the budget 181 = 6Qx + 8Qy find the optimal consumption of X. Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 1.2, 1.14 = 1.1). For the utility function U = Qxarrow_forwardGiven the utility function: U = ln c + l + ln c’ + l’ and the budget constraint: w(ℎ−l)+(w′(ℎ−l′))/(1+r)=c+(c′)/(1+r) (see pictures of function and constraint) where c = current consumption, c' = future consumption, l = current leisure, l' = future leisure, and r is the market interest rate.Suppose that the current wage, w = 20 and the future wage w' = 22. a) What is the optimal value of current consumption, c? b) What is the optimal valueof future consumption, c’*?arrow_forwardAnn's utility function is U = q1q2/(q1 + q2). Solve for her optimal values of q1 and q2 as a function of p1, p2 and Y.arrow_forward
- Which of the following utility functions represents preferences over consumption bundles (X, Y) that violate the assumption of diminishing MRS? (a) U(X,Y) = 3 ln(X) + 5 ln(Y) (b) U(X,Y) = X² + y² (c) U(X, Y) = XY (d) U(X,Y) = X² + Y² (e) U(X, Y) = X¹Y³arrow_forwardJane receives utility from days spent traveling on vacation domestically (D) and days spent traveling on vacation in a foreign country (F), as given by the utility function U(D,F)= 10DF. In addition, the price of a day spent traveling domestically is $100, the price of a day spent traveling in a foreign country is $400, and Jane's annual travel budget is $4000. An indifference curve associated with a level of utility equal to 800 and an indifference curve associated with utility of 1200 are illustrated in the figure to the right. Using the line drawing tool, graph Jane's budget line. Label this line L,. Carefully follow the instructions above, and only draw the required object. Can Jane afford any of the bundles that give her a utility of 800? Can Jane afford any of the utility bundles that give her a utility of 1200? Find Jane's utility-maximizing choice of days spent traveling domestically and days spent in a foreign country. days of domestic travel and days of foreign travel. (Enter…arrow_forwardConsider the problem of a consumer who chooses between consuming goods and enjoying leisure in the current and future periods. Denote the consumption and leisure in the current period as C and l, and the consumption and leisure in the future period as C′ and l′, respectively. The preference is summarized by the following utility function: U(C,C′,l,l′)=lnC+ψlnl+β(lnC′ +ψlnl′). This individual is endowed with h units of time in each period. Wage rate per unit of labour time is w and w′ in the current and future period. In addition, the consumer receives profit transfer π and π′ and pays lump-sum taxes T and T′ in the current and future periods. Denote the saving in the current period as Sp. Answer the following questions. Derive the life-time budget constraint of this consumer. Set up the consumer’s problem. Solve for consumption (C and C′), leisure (l and l′), and saving (Sp). How does an increase in wage rate w affect C, Sp, and l?arrow_forward
- Prove that if u is a reasonable utility function, then u(w) – u(w – h) > u(w+ h) – u(w) for any w > 0 and h e (0, w).arrow_forwarda) Alex spends all his money on jeans and shirts. His utility function is given: U(X,,X;)= X ,X; The price of jeans is Php 2.00 and the price of shirts is Php 3.00 and his income is Php 100. If the price of shirts falls to Php 2.00. Find the substitution and the ordinary income effect. b) max u(x, y) = x"²y"? s.t. 120 = 2y + 4x Solve for x*, y*, and total utility. c) Draw two different graphs showing the Marshallian demand curve and the Hicksian demand curve. What is the difference between the two demand curves?arrow_forwardwhat is the derivative of the utility function UU = log (100-2PPii) + log(PPjj+PPdd) with respect to PPjj. Budget constaint XXii = 100 - 2PPiiarrow_forward
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