EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
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Chapter 3, Problem 4RE
To determine
To state:
An example of preferences that does notmeet the expectations of the assumption that preferences are transitive.
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Which form of utility is expressed on ranking the bundles According to preferences
Which of the following utility functions represent preferences which do not satisfy monotonicity?
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O u=
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I am unsure the direction the utility functions would go in , with this specific scenario
Chapter 3 Solutions
EBK MICROECONOMICS
Ch. 3 - Prob. 1RECh. 3 - Prob. 2RECh. 3 - Prob. 3RECh. 3 - Prob. 4RECh. 3 - Prob. 5RECh. 3 - Prob. 6RECh. 3 - Prob. 7RECh. 3 - Prob. 8RECh. 3 - Prob. 9RECh. 3 - Prob. 10RE
Ch. 3 - Prob. 11RECh. 3 - Prob. 3.1PCh. 3 - Prob. 3.2PCh. 3 - Prob. 3.3PCh. 3 - Prob. 3.4PCh. 3 - Prob. 3.5PCh. 3 - Prob. 3.6PCh. 3 - Prob. 3.7PCh. 3 - Prob. 3.8PCh. 3 - Prob. 3.9PCh. 3 - Prob. 3.10PCh. 3 - Prob. 3.11PCh. 3 - Prob. 3.12PCh. 3 - Prob. 3.13PCh. 3 - Prob. 3.14PCh. 3 - Prob. 3.15PCh. 3 - Prob. 3.16PCh. 3 - Prob. 3.17PCh. 3 - Prob. 3.18PCh. 3 - Prob. 3.19PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.26P
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- Consider the following utility function for goods x1 and x2: u(x1,x2)=(x1+x2)2 What type of preferences does this utility function represent and why?arrow_forwarduestion1:Donna and Jim are two consumers purchasing strawberries and chocolates. Jim’s utility function is U (x, y) = xy and Donna’s utility function is U (x, y) = x2y where x denotes strawberries and y denoteschocolates. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2. Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4? What is the optimal bundle for Jim, and for Donna, when the price of strawberries rises to $3?Question2:Consider a one-period ecoarrow_forwardwhat is the ordered pair ?arrow_forward
- Given a utility function that represents preference over bundles which consists of two goods. Can we find some information of the relative cardinal value between two bundles? Explain your answer.arrow_forwardsuppose a consumer consumes two goods x and y with utility function u=x^0.5+y^1.5, does the utility funciton exhibit diminishing marginal utility for (i) x (ii)y?arrow_forwardConsider two individuals whose utility functions are given byarrow_forward
- Check if the following utility functions represent the same preferences: u = x+y, v = x3 + y3, w = -1/(x+y). Give reasons for your answer.arrow_forwardSarah has the following utility function: u(x, y) = 10x + 12y.arrow_forwardQuestion 3 Lucy consumes only scoops of ice-cream (x) and cones (y). Moreover, she insists on consuming these two goods in the combination of 1 scoop of ice-cream and 1 cone. If there are more scoops of ice-cream than cones, she throws the extra ice-cream away. If there are more cones than scoops of ice-cream, she throws the extra cones away. Her utility function for ice-cream and cones is given by U(x, y) = min {x,y}. (The function min {x,y} returns the smaller number between x and y. In other words, if x y, min {x,y} = y; and if x = y, min {x,y} = x = y.) (a) Draw a couple of indifference curves for Lucy. Put ice-cream on the horizontal axis. (Hint: Draw the 45° line. Choose a point on the line. If you increase the amount of x but not y from that point, how would Lucy's utility change? If you increase the amount of y but not x from that point, how would Lucy's utility change?) (b) Suppose each scoop of ice-cream costs $2, and each cone costs $1. Lucy has an income of $6. Draw her…arrow_forward
- Could Figure 3.2 be a single indifference curve if preferences are monotonic?arrow_forwardConsider the utility function U(x,y)=5x +2y. An agent with a budget constraint of 10x + 5y = 20 will choose which of the following bundles in order to maximize his/her utility? 1 unit of x and 2 units of y 10 units of x 2 units of y 2 units of x 4 units of yarrow_forwardSuppose Paco has an annual entertainment budget of I. He spends his entertainment budget on only 2 goods: video games and movies. The price of a video game is P, and the price of a movie is Pm. Paco's utility function for video games (v) and movies (m) is: U(v, m) = 4v²m. a. Derive Paco's demand functions for video games and movies as functions of only exogenous variables. b. Write Paco's indirect utility function.arrow_forward
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