Kai has a utility function given by min{x1,4x2} a. Find Kai’s demand function. b. If (M,...

Question

Question

Kai has a utility function given by min{x_1,4x₂}
a. Find Kai’s demand function.
b. If (M, P1, P2) = (50, 5, 10), find Kai’s optimal bundle. Show your work and use graphs.

business economics

Answer 1

Answer #1

Answer 2

Similar Homework Help Questions

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)
h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices...

h. U(1, 2 For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m. 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods. For each of your answers in question 2, write down the consumer...
5. Suppose the utility function is given by U(zı,T2) = 14 min{2x, 3y). Calculate the optimal...

5. Suppose the utility function is given by U(zı,T2) = 14 min{2x, 3y). Calculate the optimal consumption bundle if income is m, and prices are pi, and p2

5. Consider the indirect utility function given by: m v(P1, P2, m) = P1 + P2 (a) What are the demand functions (b) What...

5. Consider the indirect utility function given by: m v(P1, P2, m) = P1 + P2 (a) What are the demand functions (b) What is the expenditure function? (c) What is the direct utility function?
1.) Liz has utility given by u(x2,x1)=x1^7x2^8. If P1=$10, P2=$20, and I = $150, find Liz’s...

1.) Liz has utility given by u(x2,x1)=x1^7x2^8. If P1=$10, P2=$20, and I = $150, find Liz’s optimal consumption of good 1. (Hint: you can use the 5 step method or one of the demand functions derived in class to find the answer). 2.) Using the information from question 1, find Liz’s optimal consumption of good 2 3.) Lyndsay has utility given by u(x2,x1)=min{x1/3,x2/7}. If P1=$1, P2=$1, and I=$10, find Lyndsay’s optimal consumption of good 1. (Hint: this is Leontief utility)....
d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle...

d. U (1, ) (1a)(b-a For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an income m 1. 2. For the utility function above, find the consumer's optimal consumption bundle when prices of goods 1 and 2 are pl and p2, and the consumer has an endowment (el, e2) of the two goods For each of your answers in question 2, write down...

* * 5. A consumer's preferences are given by the utility function U = x;'°*". The...

* * 5. A consumer's preferences are given by the utility function U = x;'°*". The price of good 1 is 3 and the price of 2 is 6, while her income is 36. The utility maximising bundle for the consumer is a. X* = 4, x* = 4 b. x1 = 4, x = 3 C. x1 = 2, x = 6 d. x1 = 8, x* = 2 e. None of the above * * N * *...
The utility function is u = 3x1 + x2, and the budget constraint is m =...

The utility function is u = 3x1 + x2, and the budget constraint is m = p1x1 + p2x2. a) What are the demand functions x1(m,p1,p2) and x1(m,p1,p2)? For m=100, p1=4 and p2=1, what are the consumption amounts x1 and x2? b) Assume only p1 changes to p1’=2, define the new consumption values as x1M and x2M. c) Define as uH the utility amount you get from consumption bundle in part a. Find the consumption bundle (x1H,x2H) that gives you...
(20 points) Amy has utility function u(x1, x2) = min{2x12x2, x1x22}. De- rive Amy’s demand function...

(20 points) Amy has utility function u(x1, x2) = min{2x12x2, x1x22}. De- rive Amy’s demand function for x1 and x2. For what values (if any) of m, p1, and p2 are the goods gross complements or gross substitutes of each other?

Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of...

Consider a consumer with a utility function u(x1, x2) = min{21, 222}. Suppose the prices of good 1 and good 2 are p1 = P2 = 4. The consumer's income is m = 120. (a) Find the consumer's preferred bundle. (b) Draw the consumer's budget line. (c) On the same graph, indicate the consumer's preferred bundle and draw the indifference curve through it. (d) Now suppose that the consumer gets a discount on good 1: each unit beyond the 4th...