A. Jack enjoys a cup of cappuccino every morning, which is made with equal parts of steamed milk (m) and expe). Suppose Jack's utility function is (,) min(m). Graph Jack's inderace curves when U-4 and 8 B. Leslie bays 2 good and y. His utility function is 7(x)=5+3. 1. Plot this consumer's indifference curves when U-15 and 0-20 2. What is the shape of Leslie's indifference curves? 3. For Leslie, how are those two goods related? C. L's Tim hadi utility function for the same goods (3)√ 1. Plot this consumer's indifference curves when U-15 and -20 2. What is the shape of Tim's indifference curves?
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- Page of 3 > Due November 1, 2 Press Esc to exit full screen A. Jack enjoys a cup of cappuccino every morning, which is made with equal parts of steamed milk (m) and espresso(e). Suppose Jack's utility function U(m, e) = min(m, e). Graph Jack's indifference curves when U = 4 and U = 8. B. Leslie buys 2 goods: z and y. His utility function is U(z,y) = 5x+3y. 1. Plot this consumer's indifference curves when U = 15 and U = 20. What is the shape of Leslie's indifference curves? 3. For Leslie, how are these two goods related? C. Leslie's friend Tim has a different utility function for the same goods U(x, y) = √zy. 1. Plot this consumer's indifference curves when U = 15 and Ū = 20. 2. What is the shape of Tim's indifference curves? D. A consumer's utility function for goods 2 and y is U(z,y) = x+2y. 2. 1. Calculate the consumer's marginal utility for each good at (2,2) (Hint: marginal utility represents the amount of utility the consumer gains by consuming one more unit of this good. You can…I like drinking Smirnoff and Stoli Vodka, but I really only careabout the total amount of alcohol I get out of it. They areperfect substitutes. Smirnoff is sold in liter bottles that are100 proof (that’s 50% alcohol). Stoli is sold in liter bottlesthat are 80 proof (40% alcohol). What is my utility functionfor bundles of these two vodkas? What do my indifferencecurves look like?Mylie's total utility from singing the same song over and over is 70 utils after one repetition, 110 utils after two repetitions, 140 utils after three repetitions, 160 utils after four repetitions, 120 utils after five repetitions, and 60 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Repetitions 0 1 2 3 4 5 6 Total Utility Marginal Utility 0 70 110 140 160 120 60 b. Once Mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous song or less than the previous song? O More than the previous song O Less than the previous song
- 8. Jane lives in a dormitory that offers soft drinks and chips for sale in vending machines. Her utility function is U 3SC (where S is the number of soft drinks per week and C the number of bags of chips per week), so her marginal utility of S is 3C and her marginal utility of C is 3S. Soft drinks are priced at £0.50 each, chips £0.25 per bag. a. Write an expression for Jane's marginal rate of substitution between soft drinks and chips. b. Use the expression generated in part (a) to determine Jane's optimal mix of soft drinks and chips. c. If Jane has £5.00 per week to spend on chips and soft drinks, how many of each should she purchase per week?Mylie’s total utility from singing the same song over and over is 50 utils after one repetition, 90 utils after two repetitions, 120 utils after three repetitions, 80 utils after four repetitions, 20 utils after five repetitions, and -60 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Repetitions Total Utility Marginal Utility 0 0 — 1 50 2 90 3 120 4 80 5 20 6 -60Currently, Paula is maximizing utility by purchasing five TV dinners (T) and four LeanCuisine Meals (L) each week. Suppose both T and L cost $5 each.a. Graph Paula’s initial utility-maximizing choice.b. Suppose the price of T falls by $1 and the price of L rises by $1.25. Can Paula stillafford to buy her initial consumption choices? What do you know about her new budgetconstraint?c. Make a new graph to show why Paula will choose to consume more T and less Lgiven her new budget constraint to maximize utility. Is her utility increased, decreased,or unchanged given the price change? [Hint: try to make the graph as big as possible tosee how the utility is tangent/intersects with the lines more easily] d. In part (b), suppose another scenario where the price of T rises by $1 and the priceof L falls by $1.25. Is Paula’s utility increased, decreased, or unchanged given the pricechange?
- 3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money,…The table shows the total utility (TU) that James receives from consuming different amounts of two goods X and Y, per month. Quantity TUx MUx MUx/Px TUy MUy MUy/Py 0 0 0 0 0 0 0 1 50 50 16.67 75 75 25.00 2 88 38 12.67 117 42 14.00 3 121 33 11.00 153 36 12.00 4 150 29 9.67 181 28 9.33 5 175 25 8.33 206 25 8.33 6 196 21 7.00 225 19 6.33 7 214 18 6.00 243 18 6.00 8 229 15 5.00 260 17 5.67 9 241 12 4.00 276 16 5.33 d.How much total utility will James experience by buying the utility-maximizing combination? e.Suppose the price of good Y increases to $6. How many units of X and Y will he buy to maximize his utility now?Calvin is back. He still spends all his income on books and other things, Y, and the following graph represents a set of his convex indifference curves representing his preferences for books and other things. Q of Y 350 340 330- 320 310 300 290 280 270 260 250 240 230 220 210 200 190 180 170- 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 BOL 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Q of books The opportunity cost of a book is Mux The MRS for books is SE IE TE a. NOW, Calvin has an income of $180 (in the previous problem he had $240) to spend on books and Y. If the price of books, PB, is $10 and the price of Y, Py, is $1, draw Calvin's budget constraint (BCo) and label his optimal consumption point A. b. At Point A, Calvin consumes 9 Muy A Rx ? By = 10 = 90 =10 9 books and 90 Y. 10 Ula books and c. If the price of books increases to $30/book, label his actual consumption bundle after the price change C, the new indifference curve U₁ and the new budget constraint…
- 4 Assume you are always willing to trade two Cardinal tickets for one beer, or one beer fortwo Cardinals tickets, create an indifference map showing this relationship for threelevels of utility. Calculate the MRS for each indifference curve.NIVERSITY DURAI Consider the following data describing the change in Nora's utility when she consumes various levels of Nuts and chocolate per week, the price per portion for the considered goods are respectively AED 20 and AED10. Nora has a budget equal to 160 per day to spend on her snack. Q Nuts Total UtilityQ Chocolate Total Utility ChocolateMU Nuts MU ChocolateMU/ AEDMU/AED MRS Chocolate Nuts Nuts 40 1 28 72 52 100 3. 72 4 124 88 144 5. 102 160 6. 114 7 172 122 1. Complete the table above by calculating the marginal utility, the marginal utility per dollar spent and marginal rate of substitution for each good. 2. Identify the potential set of equilibrium points Where MUI/P1=MU2/P2 Nuts Chocolate Income 2. 2. 6.Illustrate and explain how consumer equilibrium is achieved using the indifference curve?Discuss how the demand elasticity of a product changes? Give examples.