Write an equation of a utility function that is appropriate to modelling preferences over the following...
Write an equation of a utility function that is appropriate to modelling preferences over the following goods and then graph a representative indifference curves indicating the direction of increasing preference.
a. left shoes and right shoes.
Equation:
Graph:
b. Food and housing.
Equation:
Graph:
Blue and Black pens (preference blue pens)
Equation:
Graph:
Homework Answers
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Write an equation of a utility function that is appropriate to
modelling preferences over the following...
3. Michael has preferences over two goods, z1 and r2, represented by the utility function (a)...
3. Michael has preferences over two goods, z1 and r2, represented by the utility function (a) Find the MRS12 associated with this utility function. (b) Use the MRS12, the price ratio, and the budget constraint to find Michael's optimal bundle when m 3000, P50, and 10. for r2. (You will need to calculate the utility at the optimal point in order to do this.) a single graph. Be sure to label the curves, the optimal point, and the axes. (c)...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3 A. Let Income 1200, PE 2 and PH6. Find the quantity demanded of housing and food. Graph the budget constraint and the optimal bundle that you found. Make sure to include an indifference curve. Let the price of food increase to 4. Add the new budget constraint, find the new optimal bundle and add it to your graph. B.
John has the following utility function that represents his preferences over food (x) and housing (y) (his only two exp...
John has the following utility function that represents his preferences over food (x) and housing (y) (his only two expenses) and marginal utilities: มุ4 for a level of wealth W and prices of food and housing P y respectively. Using the results from the previous homework answer the following questions Write down the Engel Curve for both goods and graph them 2) Assume W-10 and the price of food changes from 1 to 3 while the price of housing remains...
QUESTION 4 Reshad's preferences over goods 1 and 2 are given by the following utility function:...
QUESTION 4 Reshad's preferences over goods 1 and 2 are given by the following utility function: U(q1, q2)q2Select all that applies: O a His preferences satisfy "more is better O b. His preferences fail the transitivity assumption C. His indifference curves are downward sloping His preferences are convex D e. He dislikes good 1 Marginal rate of substitution for his preferences is given by MRS12
Robinson Crusoe’s preferences over coconut consumption, C, and leisure, R, are represented by the utility function...
Robinson Crusoe’s preferences over coconut consumption, C, and leisure, R, are represented by the utility function U(C, R) = CR. There are 48 hours available for Robinson to allocate between labor and leisure. If he works L hours, he will produce 2√? of coconuts. a) Draw a graph showing Robinson’s production function. On the same graph sketch Robinson’s indifference curves over labor and coconuts. (Remember that labor is a bad.) b) Calculate the equilibrium prices and allocation. Draw the isoprofit...
Question 1: Write down a utility function and draw the corresponding indifference curves for each of...
Question 1: Write down a utility function and draw the corresponding indifference curves for each of the preferences described below. Put the quantity of the first good orn the horizontal axis and the quantity of the second good on the vertical axis. (a) Paul likes pencils and pens, but does not care which he writes with. (b) Rhonda likes carrots and dislikes broccoli (c) Emily likes hip-hop iTunes downloads and doesn't care about heavy metal down loads. (d) Michael only...
4. consider the following utility functions a) for each of these utility function what is the equation of an indifferenc...
4. consider the following utility functions
a) for each of these utility function what is the equation of an
indifference curve ?
c) for each utility function show weather the function exhibits
the diminishing rate of substitution property
d) do the above utility function represent the same preference
ordering? why or why not?
c) Suppose the price of beer doubles, but the price of pizza and Tom's income stay the same. How much beer is Tom consuming as a percentage...
Suppose a consumer’s preferences over goods 1 and 2 are represented by the utility function U(x1,...
Suppose a consumer’s preferences over goods 1 and 2 are represented by the utility function U(x1, x2) = (x1 + x2) 3 . Draw an indifference curve for this consumer and indicate its slope.
Assume that an individual’s preferences is represented by the following utility function: ?(?, ?) = (?^1/3)*(y^2/3)...
Assume that an individual’s preferences is represented by the following utility function: ?(?, ?) = (?^1/3)*(y^2/3) a. What could you tell about the type of x and y? (“good” , “bad” or a “neuter”) b. Derive the equation for his/her indifference curve for utility level of 100? c. Derive marginal utility of x and marginal utility of y as a function of x,y. d. Does goods x and y exhibit diminishing marginal utility, constant marginal utility, or increasing marginal utility?...
1. (25) Consider the following utility function which specifies Eli’s preferences over two goods, Xy- lophones...
1. (25) Consider the following utility function which specifies Eli’s preferences over two goods, Xy- lophones (X) and Yo-Yos (Y ). (Please note that we call this type of utility function quasi-linear.) √ U(X,Y)=10 X+20Y (a) (5) What is the marginal utility of X? Label your answer MUX and draw a box around your answer. What is the marginal utility of Y? Label your answer MUY and draw a box around your answer. What is the marginal rate of substitution...
3. Michael has preferences over two goods, z1 and r2, represented by the utility function (a) Find the MRS12 associated with this utility function. (b) Use the MRS12, the price ratio, and the budget constraint to find Michael's optimal bundle when m 3000, P50, and 10. for r2. (You will need to calculate the utility at the optimal point in order to do this.) a single graph. Be sure to label the curves, the optimal point, and the axes. (c)...
Long Question #2 Consider preferences over food and housing represented by the utility function U F2/3H1/3 A. Let Income 1200, PE 2 and PH6. Find the quantity demanded of housing and food. Graph the budget constraint and the optimal bundle that you found. Make sure to include an indifference curve. Let the price of food increase to 4. Add the new budget constraint, find the new optimal bundle and add it to your graph. B.
John has the following utility function that represents his preferences over food (x) and housing (y) (his only two expenses) and marginal utilities: มุ4 for a level of wealth W and prices of food and housing P y respectively. Using the results from the previous homework answer the following questions Write down the Engel Curve for both goods and graph them 2) Assume W-10 and the price of food changes from 1 to 3 while the price of housing remains...
QUESTION 4 Reshad's preferences over goods 1 and 2 are given by the following utility function: U(q1, q2)q2Select all that applies: O a His preferences satisfy "more is better O b. His preferences fail the transitivity assumption C. His indifference curves are downward sloping His preferences are convex D e. He dislikes good 1 Marginal rate of substitution for his preferences is given by MRS12
Question 1: Write down a utility function and draw the corresponding indifference curves for each of the preferences described below. Put the quantity of the first good orn the horizontal axis and the quantity of the second good on the vertical axis. (a) Paul likes pencils and pens, but does not care which he writes with. (b) Rhonda likes carrots and dislikes broccoli (c) Emily likes hip-hop iTunes downloads and doesn't care about heavy metal down loads. (d) Michael only...
4. consider the following utility functions
a) for each of these utility function what is the equation of an
indifference curve ?
c) for each utility function show weather the function exhibits
the diminishing rate of substitution property
d) do the above utility function represent the same preference
ordering? why or why not?
c) Suppose the price of beer doubles, but the price of pizza and Tom's income stay the same. How much beer is Tom consuming as a percentage...
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