Question

Assume that Andy consumes two goods X and Y. His total utility (assumed measurable) of each...

Assume that Andy consumes two goods X and Y. His total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The prices of X and Y are, respectively, $5 and $10.

Units of the Good

Total Utility of X

Total Utility of Y

1

2

3

4

5

6

7

8

50

95

135

170

200

225

245

260

400

750

950

1100

1220

1320

1400

1450

a. If Andy is given $65 to spend, how many X and Y will he consume daily? Show your work.

b. If his budget increases to $110, what combination will the person consume? Show your work.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SOLUTION:-

THANK YOU, if any quearies please leave your valuable comment on comment box.......

If possible then rate the answer as well.......

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
Q: Mike consumes only two goods: x and y. His Utility function is given by U(x,y)...
Q: Mike consumes only two goods: x and y. His Utility function is given by U(x,y) = 2x+2y Mike has an income of $200. The price of good y is $2. Suppose the price of good x changes from $1 to $2. 1. Find the compensating variation and explain your answer. Show the CV in a diagram. 2. Find the equivalent variation and explain your answer. Show the EV in a diagram.
Let us suppose that a person consumes only goods X and Y, and his utility is...
Let us suppose that a person consumes only goods X and Y, and his utility is given by the function:U (X, Y) = √(X.Y)a. Find the marginal rate of substitution of X for Y. (Note: MRS = MUx/ MUy and MUx = ∂U/∂X, MUy = ∂U/∂Y) (point 1)b. If the price of X is $1.50 and that of Y is $3.0, and the person has $30 to spend on these goods, find the value of X and Y that maximize...
Ron consumes two goods, X and Y. His utility function is given by U(X,Y) = 44XY....
Ron consumes two goods, X and Y. His utility function is given by U(X,Y) = 44XY. The price of X is $11 a unit; the price of Y is $8 a unit; and Ron has $352 to spend on X and Y. a. Provide the equation for Ron’s budget line. (Your answer for the budget line should be in the form Y = a – bX, with specific numerical values given for a and b.) b. Provide the numerical value...
Max consumes two goods x and y, and ratio of marginal utility of x and y...
Max consumes two goods x and y, and ratio of marginal utility of x and y is always 2. The price of x is $2, and the price of y is $3. Income is $10. How much x does Max demand? How much y does Max demand?
Janice Doe consumes two goods, X and Y.   Janice has a utility function given by the...
Janice Doe consumes two goods, X and Y.   Janice has a utility function given by the expression:   U = 4X0.5 Y0.5 . So, MUX = 2Y0.5 and MUY = 2X0.5 . The current prices of X and Y are 25 and 50, respectively. Janice X0.5  Y0.5 currently has an income of 750 per time period. Write an expression for Janice's budget constraint. Calculate the optimal quantities of X and Y that Janice should choose, given her budget constraint
Henry consumes two goods, x and y. Good y is sold in an unusual way. There...
Henry consumes two goods, x and y. Good y is sold in an unusual way. There is only one supplier, and the more good y you buy from him, the higher the price you have to pay per unit. In fact y units of good y will cost Henry y square. dollars. Good x is sold in the usual way at a price of 2 dollars per unit.Henry’s income is 20 dollars and his utility function isU(x; y) =x+ 2y....
Tom spends all his $100 weekly income on two goods, X and Y. His utility function...
Tom spends all his $100 weekly income on two goods, X and Y. His utility function is given by U(X,Y) =XY. If Px=4 and Py=10 a) how much of each good should the buy? Please show graphically (specify clearly x-axis and y-axis and intercepts of each axis) b) Same as Problem 1, except now Tom’s utility function is given by U(X,Y) = X^1/2 Y^1/2 c) Find the MRS at the tangent points (optimal point) in a and b. Can you...
Sam's is interested in two goods, X and Y. His indirect utility function is U* =...
Sam's is interested in two goods, X and Y. His indirect utility function is U* = M px-.6 py-4.    ( same as U* = M /(px.6 py0.4 ) ) where M is Sam's income, and px   and py denote respectively the price of good X and the price of good Y.   Sam's market demand functions are X*=0.6M/px and Y* = 0.4M/py . Find the absolute value of the change in Sam's consumers surplus if the price of good X...
Quasimodo consumes cereals and other things. His utility function for cereals x and money to spend...
Quasimodo consumes cereals and other things. His utility function for cereals x and money to spend on other goods y is given by u(x, y) = 100x − x 2 + y. (a) Let p denote the price for cereals and y be a numeraire whose price is set equal to 1. What is his demand curve for cereals? (b) If the price of cereals is $20, how many cereals will he consume? What if the price of cereals is...
Suppose John has an income of $300 and spends his income to purchase two goods (X...
Suppose John has an income of $300 and spends his income to purchase two goods (X and Y ). Price of Y is $5 and price of X is $10. Furthermore, John always consumes 2 units of Y with 1 unit of X. (a) How many units of X and Y should John consume in order to maximize his utility? (b) Suppose that the price of X goes up to $15 (income and price of Y are the same). How...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT