Question

Maria spends her entire budget and consumes 5 units of x and 6 units of y....

Maria spends her entire budget and consumes 5 units of x and 6 units of y. The price of x is twice the price of y. Her income doubles and the price of y doubles, but the price of x stays the same. If she continues to buy 6 units of y, what is the largest number of units of x that she can afford?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

10 units of X

Lets take an sscenario Entire budget is 160

Px = 20 Py =10

we buy 5 units of X and 6 units of Y

Budget Line = Px*X + Py*Y = 160

20*5+10*6 =160

100+60 = 160

Now budget double and Py is also double

this means new budget = 320

and new Py =20 & Px remains same i.e 20

Budget Line = Px*X + Py*Y = 320

20*X+20*6 =320

20*X+120 = 320

20*X=320-120

20*X = 200

X = 200/20

X = 10

For any quary please comment and please Upvote thank you in advance

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
2.Mustafa has a fixed budget of 20 $.He spends his budget on two goods,X and Y....
2.Mustafa has a fixed budget of 20 $.He spends his budget on two goods,X and Y. The price of good X is 4 $ and the price of good Y is 2 $. The following table is given :             Quantity of X TU from X Quantity of Y TU from Y 0 0 0 0 1 16 1 10 2 28 2 18 3 36 3 24 4 40 4 28 5 41 5 30 a.Mustafa is currently consuming...
a)Maria wants to buy a car. She has saved $2,500 for a down payment, and she...
a)Maria wants to buy a car. She has saved $2,500 for a down payment, and she can afford payments of $250 per month for 5 years. Her credit union has offered her an auto loan that charges 4.8% per year compounded monthly for 5 years. What is the largest loan she can afford? What is the most expensive car she can afford? b) Find the interest rate needed for an investment of $5100 to triple in 6 years if interest...
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...
A person spends all his/her $400 weekly income on goods, X and Y. His/her utility function...
A person spends all his/her $400 weekly income on goods, X and Y. His/her utility function is U(X,Y)=XY. a) What is the marginal rate of substitution (MRS) for consuming 4 units of X and 8 units of Y? b) How much of each good would be purchased if the price of X is 4 and the price of Y is 8?
2. An individual consumes products X and Y and spends $25. The pries of the two...
2. An individual consumes products X and Y and spends $25. The pries of the two goods are $3 per unit of X and $2 per unit of Y. The consumer in this case has a utility function expressed as: U(X,Y)=0.5XY          MUX=0.5Y     MUY=0.5X Draw the indifference curve for this consumer at U=20.       (2 pts) Does this consumer’s preference exhibit diminishing MRS?            (1 pt) Express the budget equation mathematically.                        (2pts) Determine the values of X and Y that will maximize utility in the consumption of X...
Ned buys goods X and Y. He can just afford the bundle X = 4 and...
Ned buys goods X and Y. He can just afford the bundle X = 4 and Y = 4. He can also afford X = 6 and Y= 3. Each of these bundles exhausts his income. For full credit, show all necessary work to answer the questions below. What is the ratio of the price of x to the price of y? Write an equation that gives you Ned's budget line. If Ned spent all his money on x, how...
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...
4. Construct the relevant constraint for Bryce who spends his entire income on X and Y...
4. Construct the relevant constraint for Bryce who spends his entire income on X and Y if Income(I) = $120 Px = $5/unit for X < 10 ; Px = $3/unit for X>10 (ALL units) Py = $8/unit b. If Bryce buys 8 units of X, do his preferences violate any of the assumptions of consumer choice theory? c. How would the constraint be affected if the discount applies to additional units only?
Consider a consumer that has preferences given by u(x,y)= x^(2/5) y^(3/5) and a budget of $300....
Consider a consumer that has preferences given by u(x,y)= x^(2/5) y^(3/5) and a budget of $300. This consumer can purchase either good x or good y. The consumer faces a price of good x of $1 and a price of good Y of $6. What is the income effect of a price decrease of good Y to $1.50? (Note: Round your answer to the nearest whole number. For example, if your answer is 15.75 enter in 16)
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....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT