Question

Is the following statement true or false? Briefly explain your answer. "Charlie’s utility function is U(...

Is the following statement true or false? Briefly explain your answer. "Charlie’s utility function is U( x, y) = xy 2. His marginal rate of substitution between x and y does not change if the amount of both goods doubles. "

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

the given statement is true, his marginal rate of substitution between x and y does not change if the amount of both goods doubles

how ?

we can see that if are doubling the x and y quantites the MRS is not changing.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
True/False Questions. For each question below, please answer “true” or “false” and explain why. An answer...
True/False Questions. For each question below, please answer “true” or “false” and explain why. An answer without an explanation will result in no credit. 2. (5 points) Max Gross has the utility function U(x,y) = max⁡{x, y}. If the price of x is the same as the price of y, Max will buy equal amounts of x and y. 3. (5 points) Charlie’s utility function is U(x,y) = xy^2. His marginal rate of substitution between x and y does not...
Consider a consumer whose preferences over the goods are represented by the utility function U(x,y) =...
Consider a consumer whose preferences over the goods are represented by the utility function U(x,y) = xy^2. Recall that for this function the marginal utilities are given by MUx(x, y) = y^2 and MUy(x, y) = 2xy. (a) What are the formulas for the indifference curves corresponding to utility levels of u ̄ = 1, u ̄ = 4, and u ̄ = 9? Draw these three indifference curves in one graph. (b) What is the marginal rate of substitution...
1. Consider the following information: Jessica’s utility function is U(x, y) = xy. Maria’s utility function...
1. Consider the following information: Jessica’s utility function is U(x, y) = xy. Maria’s utility function is U(x, y) = 1,000xy. Nancy’s utility function is U(x,y) = -xy. Chawki’s utility function is U(x,y) = xy - 10,000. Marwan’s utility function is U(x,y)= x(y + 1). Which of these persons have the same preferences as Jessica? 2. Suppose the market demand for a product is given by Qd = 1000 −10P      and the market supply is given by Qs= −50...
. Suppose your utility depends on two goods: x and y. The utility function is u(x,...
. Suppose your utility depends on two goods: x and y. The utility function is u(x, y) = ln(x) + ln(y) . Suppose you have an income of $800. Further, assume that the price of x is 8 and the price of y is 10. Write down the equation for the budget constraint. Compute the marginal rate of subsitution between x and y. • Compute the utility maximizing combination of x and y. • Suppose your income increases to $1000...
For the utility function U(X,Y) = XY^3, find the marginal rate of substitution and discuss how...
For the utility function U(X,Y) = XY^3, find the marginal rate of substitution and discuss how MRS XY changes as the consumer substitutes X for Y along an indifference curve.
(Hajikhameneh & Rietz) Answer the following questions for a consumer with utility function U(x, y) =...
(Hajikhameneh & Rietz) Answer the following questions for a consumer with utility function U(x, y) = x2 y2 and a budget constraint of g(x, y) = 2x + 4y = 40. You must show all of your work for full credit. a. What is the marginal utility of x? of y? b. In one to two sentences, define the economic meaning of the term “marginal utility.” c. What is the marginal rate of substitution for the given utility function? d....
Suppose the utility function for a consumer is given by U = 5XY. X is the...
Suppose the utility function for a consumer is given by U = 5XY. X is the amount of Good X and Y is the amount of Good Y. a) Neatly sketch the utility function. [Ensure that you label the graph carefully and state any assumptions that you make in sketching the curve.] b) Does this utility function exhibit diminishing marginal utility? [Ensure that you explain your answer fully.] c) Calculate the marginal rate of substitution. [Ensure that you explain your...
Answer the following questions based on the equations: U = x2y, MUx = 2xy and MUy...
Answer the following questions based on the equations: U = x2y, MUx = 2xy and MUy = x2 Determine the demand curves for x and y given px, py and I. Based on (a), are x and y normal or inferior goods? When px, py and I double then Utility also doubles. Explain if this is this is a true or false statement. Now suppose that U = 17x6y3 – 203, MUx = 102x5y3 and MUy = 51x6y2. Do the...
Suppose a consumer has the utility function U (x, y) = xy + x + y....
Suppose a consumer has the utility function U (x, y) = xy + x + y. Recall that for this function the marginal utilities are given by MUx(x,y) = y+1 and MUy(x,y) = x+1. (a) What is the marginal rate of substitution MRSxy? (b)If the prices for the goods are px =$2 and py =$4,and if the income of the consumer is M = $18, then what is the consumer’s optimal affordable bundle? (c) What if instead the prices are...
Consider a consumer with preferences represented by the utility function: U(x,y) = 3x + 6 √...
Consider a consumer with preferences represented by the utility function: U(x,y) = 3x + 6 √ y   Are these preferences strictly convex? Derive the marginal rate of substitution Suppose, the utility function is: U(x,y) = -x +2 √ y   Are there any similarities or differences between the two utility functions?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT