Urgent needed further away, where Beenish could do her shopping instead. At StoreB, the goods are half-price: good X only costs 1 AED per unit andgood Y only costs 4 AED per unit. At Store B, it still takes tx = 4minutes per unit to purchase good X and ty = 1 minutes per unit topurchase good Y. However, it also takes 40 minutes to drive to Store Band back, and so Beenish's total time for shopping is only 40 minutesif she travels to Store B.(a) In an appropriate diagram, illustrate Beenish's constraint set, giventhat she has both a monetary constraint and a time constraint butnow has the option between two stores.(b) Describe Beenish's demand for good X and her demand for goodY as a function of her preference parameter a, and illustrate herdemand for good X, i.e., x(a), in an appropriate diagram.(c) For what values of a does Beenish shop in Store A, and for whatvalues of a does she travel to Store B? Problem 2: Time and monetary constraints with optionsThere are two goods, X and Y, available in arbitrary non-negative quan-tities (so the consumption set is R²).Beenish has preferences over consumption bundles that can be representedby a differentiable, strictly increasing and strictly quasi-concave utilityfunction u: R2R+, given byu(2,y) = r®yl-awhere is the quantity of good X, y is the quantity of good Y, anda € (0, 1) is a preference parameter.1. Suppose Beenish has 80 AED. In a nearby store (called "Store A"),the price of good X is p = 2 AED per unit of good X, and the priceof good Y is q = 8 AED per unit of good Y. However, Beenish alsohas a time constraint. At Store A, it takes tx = 4 minutes per unitto purchase good X and ty = 1 minutes per unit to purchase good Y.That means, purchasing a consumption bundle (x, y) = R² at StoreA would take 4x + y minutes. Beenish has only 80 minutes to do hershopping.(a) In an appropriate diagram, illustrate Beenish's constraint set, giventhat she has both a monetary constraint and time constraint.(b) Describe Beenish's demand for good X and her demand for good Yas a function of her preference parameter a € (0, 1), and illustrateher demand for good X, i.e., x(a), in an appropriate diagram.(c) For what values of a does Beenish not spend all of her wealth? Forwhat values of a does Beenish spend all of her wealth and use upall of her available time?2. Now suppose that there is another store (called "Store B"), which is

The utility function represents consumer preferences and the satisfaction they experience from…

1. Suppose Beenish has 80 AED. In a nearby store (called "Store A"), the price of good X is p = 2 AED per unit of good X, and the price of good Y is q = 8 AED per unit of good Y. However, Beenish also has a time constraint. At Store A, it takes tx = 4 minutes per unit to purchase good X and ty= 1 minutes per unit to purchase good Y. That means, purchasing a consumption bundle (x, y) = R² at Store A would take 4x + y minutes. Beenish has only 80 minutes to do her shopping. (a) In an appropriate diagram, illustrate Beenish's constraint set, given that she has both a monetary constraint and time constraint.

1. Suppose Beenish has 80 AED. In a nearby store (called "Store A"), the price of good X is p = 2 AED per unit of good X, and the price of good Y is q = 8 AED per unit of good Y. However, Beenish also has a time constraint. At Store A, it takes tx = 4 minutes per unit to purchase good X and ty= 1 minutes per unit to purchase good Y. That means, purchasing a consumption bundle (x, y) = R² at Store A would take 4x + y minutes. Beenish has only 80 minutes to do her shopping. (a) In an appropriate diagram, illustrate Beenish's constraint set, given that she has both a monetary constraint and time constraint.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 16CTQ: Would you rather have efficiency or variety? That is, one opportunity cost of the variety of...

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