Question

Jane can spend $100 and her indifference curve is F=U/C. F means film and C means...

Jane can spend $100 and her indifference curve is F=U/C. F means film
and C means concert. Concert ticket costs $5 per ticket. The price of film ticket
falls from $5 to $1.25 per ticket.
A. Calculate the equilibrium bundle with $5 and $1.25 respectively. What is
the utility level respectively?
B. What is the compensated effect? Compensated effects means that how
many concert tickets and film tickets she will purchase when she wants to keep her
original utility level after price change.
C. How much money do we need to take away from Jane to compensate for
the price cut?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
1. Sarah enjoys watching films at home (F) and going to the cinema (C). Her utility...
1. Sarah enjoys watching films at home (F) and going to the cinema (C). Her utility function is U = FC. Each film costs £2 to download while each cinema ticket costs £8, and Sarah has £80 to spend each month on these two goods. Does Sarah's utility function satisfy the assumption that more is preferred to less? Explain. Write the expression for Sarah's budget constraint. Graph the budget constraint and determine its slope. Suppose Sarah is currently downloading 28...
3. Nora enjoys fish (F) and chips(C). Her utility function is U(C, F) = 2CF. Her...
3. Nora enjoys fish (F) and chips(C). Her utility function is U(C, F) = 2CF. Her income is B per month. The price of fish is PF and the price of chips is PC. Place fish on the horizontal axis and chips on the vertical axis in the diagrams involving indifference curves and budget lines. (a) What is the equation for Nora’s budget line? (b) The marginal utility of fish is MUF = 2C and the Marginal utility of chips...
jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of...
jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of a burger is $4 and milkshakes are $3 .a.Write the equation for Jane’s budget constraint .b.Graph Jane’s budget constraint with burgers on the horizontal axis. Be sure to label both the x-intercept and the y-intercept with the proper value. c.If Jane spends all of her money on these two goods, how many milkshakes can she buy if she buys three burgers this week? d.Draw...
Jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of...
Jane has $36 per week to spend on burgers (B) and milkshakes (M). The price of a burger is $4 and milkshakes are $3. a. Write the equation for Jane’s budget constraint. b.Graph Jane’s budget constraint with burgers on the horizontal axis. Be sure to label both the x-intercept and the y-intercept with the proper value. c.If Jane spends all of her money on these two goods, how many milkshakes can she buy if she buys three burgers this week?...
Julie has preferences for food, f, and clothing, c, described by a Cobb-Douglas utility function u(f,...
Julie has preferences for food, f, and clothing, c, described by a Cobb-Douglas utility function u(f, c) = f · c. Her marginal utilities are MUf = c and MUc = f. Suppose that food costs $1 a unit and that clothing costs $2 a unit. Julie has $12 to spend on food and clothing. a. Sketch Julie’s indifference curves corresponding to utility levels U¯ = 12, U¯ = 18, and U¯ = 24. Using the graph (no algebra yet!),...
1. Suppose utility for a consumer over food(x) and clothing(y) is represented by u(x,y) = 915xy....
1. Suppose utility for a consumer over food(x) and clothing(y) is represented by u(x,y) = 915xy. Find the optimal values of x and y as a function of the prices px and py with an income level m. px and py are the prices of good x and y respectively. 2. Consider a utility function that represents preferences: u(x,y) = min{80x,40y} Find the optimal values of x and y as a function of the prices px and py with an...
1a. Joy, who has an income of $40, can spend her income on 2 different goods,...
1a. Joy, who has an income of $40, can spend her income on 2 different goods, smoothies and energy bars. Energy bars cost $2 each, and smoothies cost $4 each. Draw her budget line. 1b. Can she buy 10 energy bars and 5 smoothies? Why or why not? 1c. The following table shows her utilities from smoothies and energy bars. 2 Quantity of smoothies Utility from smoothies Marginal utility MU / Price of smoothies Quantity of energy bars Utility from...
Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer....
Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer. ____ 2. Consumers should purchase quantities of a good to the point where MU > P. ____ 3. Voluntary exchange requires that there must be mutual gain. ____ 4. Points along a budget line represent the maximum combinations of two commodities that a consumer can afford. ____ 5. The budget line represents a consumer's preferences for a commodity. ____ 6. A change in consumer...
In this exercise, you will analyze the supply-demand equilibrium of a city under some special simplifying...
In this exercise, you will analyze the supply-demand equilibrium of a city under some special simplifying assumptions about land use. The assumptions are: (i) all dwellings must contain exactly 1,500 square feet of floor space, regardless of location, and (ii) apartment complexes must contain exactly 15,000 square feet of floor space per square block of land area. These land-use restrictions, which are imposed by a zoning authority, mean that dwelling sizes and building heights do not vary with distance to...
Discuss ethical issues that can be identified in this case and the mode of managing ethics...
Discuss ethical issues that can be identified in this case and the mode of managing ethics Enron finds itself in this case. How would you describe the ethical culture and levels of trust at Enron? Provide reasons for your assessment. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT