Ricky has utility function u=x?y. This implies that MUx=2xy. MUy=x². His income is 100. The price of y is 10. (a) Find his demand for x at price 20. (b) Find his demand for x at price 30. (c) Write down his demand function for x: that is, write down his demand for x as a function of the price of x.
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- Jane has the utility function U(x,y) = x(y+3). The price of x is 2₺ and the price of y is 1₺. Income is 15₺. a) How much x does Jane demand? How much y? b) If his income doubes and prices stay unchanged, will Jane's demand for both goods double? c) The prices change, so that x now costs 1 and y now costs 4. What is the new ordinary demand?your answer. 2. The utility function of a consumer over two goods x and y is given by u(x,y) = 20 ln x + 2y The price of y is 1. Let p denote the price of x. The consumer has an income of M> 10. The consumer's price elasticity of demand for x has a lower absolute value compared to the income elasticity of demand for y. Is this true or false? Explain by calculating both elasticities.Question 3: Robert's utility is given by U(x,x)=ln x + ln y, and therefore MUX-1/x and MUX-1/y. Let the prices and income be Px. Py and m. a. Find Robert's demand for x and y b. How is Robert's demand for x affected by an increase in Py? Explain
- Consumer spends $450 per week on two goods, X and Y. PX= $5 and PY=$3. His utility function is U= 0.5Xy2. What quantities of X and Y does he buy each week in equilibrium?Chiara has the utility function U(x1,x2) = x1(x2+5). The price of x1 is 5$ and the price of x2 is 2$. Income is 25$. A)How much of each good does Chiara demand? (without lagrangian) B)If Chiara’s income doubles, but prices remain unchanged, will Chiara’s demand double? C)How does ordinary demand change when income doubles (50$) and the price of x2 also double?Donald's utility function is U(x, y) = x + y¹/2. Currently he is buying some of both goods. If his income rises and prices don't change, he will buy more of both goods. True False
- If the demand function face by the consumer for good X is given by X=15+MP-120 Where X = Quantity demanded, M = income and P = Price of product X. Assume his original income is Kshs. 3200 per month and price of good X has increased from Kshs. 10 per unit to Kshs. 20 per unit. Calculate the magnitude of total effect (TE), substitution effect (SE) and income effect (IE) resulting from this change in price.Consider a consumer with the utility function U(X, Y) = X2 Y2 . This consumer has an income denoted by I which is devoted to goods X and Y. The prices of goods X and Y are denoted PX and PY. Income = 100 Py = 5 Px = 10 f. Show that the demand for good X is unit elastic (use the point elasticity formula). g. Show that the income elasticity for good X is equal to 1 (use the point elasticity formula).Eren’s two main hobbies are taking vacations overseas (V) and eating expensivemeals (M). His utility function is given as: U(V,M) = V2MLast year, the average price of taking a vacation overseas was US$200 and the averageprice of an expensive meal is $50. However, due to supply problems in Onions, theaverage price of an expensive meal rose to $75. The average price of a vacation did notchange. His income, which is $1500, did not change. Suppose that the Department of Welfare wants to know how much should begiven to Eren to offset his change un utility due to the price increase of an expensivemeal. Calculate the compensative variation (CV).
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