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3. What is the marginal rate of substitution of u-VIn (qa) + In (q2)? 4. Suppose...
4. Suppose an agent has utility function u(1q2.q3)1 min {q2q3), where these goods have respective prices...
4. Suppose an agent has utility function u(1q2.q3)1 min {q2q3), where these goods have respective prices p1 4 and p2 p3 3. Supposing the agent has wealth of W 24, how much of each good will the agent consume?
4. Suppose an agent has utility function u(12.93)min1q243), where these goods have respective prices pi-4 and...
4. Suppose an agent has utility function u(12.93)min1q243), where these goods have respective prices pi-4 and p2-p,-3. Supposing the agent has wealth of W-24, how much of each good will the agent consume?
4. Suppose an agent has utility function ulgr4ra) min (qz4), where these goods have respective prices...
4. Suppose an agent has utility function ulgr4ra) min (qz4), where these goods have respective prices pi = 4 and p,-P3-3. Supposing the agent has wealth of W- 24, how much of each good will the agent consume?
An individual has a utility function given by U = x1x2 Marginal Rate of Substitution is...
An individual has a utility function given by U = x1x2 Marginal Rate of Substitution is –x2/(x1) and therefore the Demand function for good 1 is x1= m/(2P1) Assume m=$42, P1=$1, P2=$1 (m=income, P1 is the price of good 1 , P2 is the price of good 2) Calculate the quantity of good one in the optimal choice bundle (x1A)
Suppose Alex’s preferences are represented by u(x1,x2) = x1x32. The marginal utilities for this utility function...
Suppose Alex’s preferences are represented by u(x1,x2) = x1x32. The marginal utilities for this utility function are MU1 = x23 and MU2 = 3x1x22. (a) Show that Alex’s utility function belongs to a class of functions that are known to be well-behaved and strictly convex. (b) Find the MRS. [Note: find the MRS for the original utility function, not some monotonic transformation of it.] (c) Write down the tangency condition needed to find an optimal consumption bundle for well-behaved preferences....
So, lets say that there are 3 groups in a community with 3 respective demand curves...
So, lets say that there are 3 groups in a community with 3 respective demand curves for public television. P1=200-Q1 P2=240-2Q2 P3=320-2Q3 Q1, Q2, and Q3 are the quantities consumed of public television, measured in hours watched) by the three groups. P1, P2, and P3 are “prices” or willingness-to-pay in dollars that each group would pay for hours watched. Suppose public television is a pure public good that can be produced at a constant marginal cost of MC = 200....
2. Suppose a monopoly firm is allowed to price discriminate in 3 markets where the prices...
2. Suppose a monopoly firm is allowed to price discriminate in 3 markets where the prices for the good in each market are given by: P1 = 63 - 401 P2 = 105 - 502 P3 = 75 - 603 where: Q = Q1 + Q2 + Q3 The cost of the output is (Q) = 20 + 15Q+Q2 a) Give the profit function for the firm. b) Find the FOC's and find the p*'s and Q*'s that maximize profit....
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of...
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of an indifference curve? b) Suppose a consumer's utility function is defined by u(x,y)=3x+y for every x>0 and y0. Calculate a formula for MRS at every combination of x and y. c) Suppose that P,-/ P, and that this consumer has an initial endowment of wealth w=100. Find this individual's utility maximizing demand of x and y. 10 pts
7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to...
7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to us about a consumer's preferences between the two goods. 8 (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3, 15), the MRSxy = 2. 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility...
Suppose an individual’s utility function is u=x11/2, x21/2. Let p1=4, p2=5, and income equal $200. With...
Suppose an individual’s utility function is u=x11/2, x21/2. Let p1=4, p2=5, and income equal $200. With a general equation and general prices, derive the equal marginal principle. Graphically illustrate equilibrium and disequilibrium conditions and how consumers can reallocate their consumption to maximize utility. What is the optimal amount of x1 consumed? What is the optimal amount of x2 consumed? What is the marginal rate of substitution at the optimal amounts of x1 and x2? As functions of p1, p2, and...
4. Suppose an agent has utility function u(1q2.q3)1 min {q2q3), where these goods have respective prices p1 4 and p2 p3 3. Supposing the agent has wealth of W 24, how much of each good will the agent consume?
4. Suppose an agent has utility function u(12.93)min1q243), where these goods have respective prices pi-4 and p2-p,-3. Supposing the agent has wealth of W-24, how much of each good will the agent consume?
4. Suppose an agent has utility function ulgr4ra) min (qz4), where these goods have respective prices pi = 4 and p,-P3-3. Supposing the agent has wealth of W- 24, how much of each good will the agent consume?
2. Suppose a monopoly firm is allowed to price discriminate in 3 markets where the prices for the good in each market are given by: P1 = 63 - 401 P2 = 105 - 502 P3 = 75 - 603 where: Q = Q1 + Q2 + Q3 The cost of the output is (Q) = 20 + 15Q+Q2 a) Give the profit function for the firm. b) Find the FOC's and find the p*'s and Q*'s that maximize profit....
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of an indifference curve? b) Suppose a consumer's utility function is defined by u(x,y)=3x+y for every x>0 and y0. Calculate a formula for MRS at every combination of x and y. c) Suppose that P,-/ P, and that this consumer has an initial endowment of wealth w=100. Find this individual's utility maximizing demand of x and y. 10 pts
7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to us about a consumer's preferences between the two goods. 8 (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3, 15), the MRSxy = 2. 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility...
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