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# Utility

### Internet communication (such as email)

2.1. In the readings we saw that Internet communication (such as email) consumed on average 57% of the time spent online and Internet browsing (such as visiting web sites) used the other 43%. We also saw that the average online user in the U.S. spent approximately 3 hours per day using the Net. Assume the incremental monetary

### Utility maximizing choice

If Fred is on a set salary and can only eat ham and drink tea. He drinks 4 bottles of tea and eats 10 lbs of ham. The price of tea is \$10 per bottle and \$4 per lb of ham. The last bottle of tea added 50 units to Fred's utility and the last lb of ham added 40 units. Would you consider that Fred was making a utility-maximizing

### Budget Constraint/Indifference Curve

At commodity bundle A, which consists of only apples and oranges, Annette's marginal utility per dollar spent on apples is 10 and her marginal utility per dollar spent on oranges is 8. Diagram a representative budget constraint and indifference curve that passes through bundle A given Annette's budget is exhausted at bundle A.

### Total Utility/Marginal Utility

The local mall has a make-your-own sundae shop. They charge customers 35 cents for each fresh fruit topping and 25 cents for each processed topping. Barara is going to make herself a sundae. The total utility that she receives from each quantity of topping is given by the table: Fresh Fruit Topping

### Solve for consumer's optimal choice (i.e. utility-maximizing bundles of goods) given a specific utility function. Calculate the expenditure function.

Let U(x,y) = x * (y^2) 1. Derive the indirect utility function as a function of px, py and M, where px and py are respectively the prices of the two goods x and y, and where M is the consumer's income. 2. Now calculate the level consumption of both goods and the level of utility achieved by this consumer if prices a

### Solving for Utility-Maximizing Bundle of Perfect Substitutes

Jennifer's utility function is given by U = x + y, where x = food and y = clothing. If her income = \$100, price of x = \$10 and price of y= \$5, find (graphically) her utility maximizing bundle of x and y. If her utility changes to U = 3x + y, how will her utility-maximizing bundle be affected?

### Equilibrium

A. Suppose first that 2 cannot pay the firm not to store waste, and the competitive price for storage is 1. Compute the Walrasian equilibrium and show that it is not Parteo efficient. Please see attached for full quesiton.

### Pareto optimal levels of effort

There is a team technology in which two workers must work together in order to produce. The revenue from their efforts is given by R = (e1e2)^1/2 where ei is the effort that worker ∈ {1, 2} puts into production. Each worker's utility is given by ui = wi − ei^2 where wi is worker i's income. (a) What are the Pareto o

### Utility maximization

A consumer buys five new college textbooks during his first year at school at a cost of \$80 each. Used books cost only \$50 each. When the bookstore announces that there will be a 10% increase in the price of new books and a 5% increase in the price of used books, the consumer's father offers him \$40 extra. Is this consumer wor

### I need detailed answers illustrated with graphs.

1. If the prices of A, B and C are \$2. \$3, and \$1 respectively, and the consumer has \$26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility? Please show how you get the answer. (Please see file attached) 2. Can you explain and illustrate with graphs(

### Consumer Behavior and Utility Maximization

Can you please answer question 1 (a-c) and question 2 (a-d). The should be approached from an Introductory Microeconomics perspective. The concept dealt with in the exercise is Consumer Behavior and Utility Maximization.

### Exercise book question

In a particular country there are three types of citizens: (1) people in jail who were caught commiting crimes; (2) people who are honest and therefore not in jail; (3) people who commited crimes but were not caught and therefore not in jail. Everyone derives utility only from income. The decision to commit a crime is based on

### Solve Microeconomics problem

Subject: Microeconomics problem Details: A consumer with the money-left-over utility function u(x) + m = 10 ln(x+1) +m is endowed with 100 units of x and \$1000. This consumer can buy or sell the commodity in question, depending on its price. If, for instance, the price of x is \$4 per unit and the consumer sells 25 units, she e

### Equlibrium Level of Output in Given Market

I. Each of 5000 consumers that are buyers of goods X and Y per period has the utility function: (see attachment) where X is the number of units of good X consumed and Y represents all other goods that the consumer purchases. The income of each consumer is \$1000. You may assume the price of Y is \$1 per unit of other goo

### Summarize Risk Aversion

Consider a risk averse agent. He faces a health risk of D(he/she has to go to the hospital and pay D, and he/she will be fine) with probability k. He/she can buy insurance at price q (that is he/she can buy at cost q a contract that pays 1 dollar if he/she has to go to the hospital). How many units of the contract will the agent

### Utility theory----five axioms of choice under uncertainty (axioms of cardinal utility)

Please explain utility theory----five axioms of choice under uncertainty (axioms of cardinal utility)

### I don't know where to start

1. Alex's preferences for bagels and wine can be isolated and examined. Assume that Alex's budget is \$200. Bagels cost \$2.00 each and wine costs \$10.00 per liter. Assume that Alex spends all of his income on bagels and wine in order to maximize his total utility. a) Write the equation for his budget line. What is the slope of t

### Need to solve the following problem

1. Regarding utility: a. the total satisfaction one gets from one's consumption is called marginal utility. b. if you buy one Big Mac that gives you marginal utility of 400 and a second one that gives you marginal utility of 250, total utility of eating two Big Macs is 650. c. according to the law of diminishing marginal

### Supply Curve Elasticity

1. A supply curve revels- a) the highest price producers are willing to accept for each level of output b) the difference between quantity demanded and quantity supplied at each price c) the maximum level of output an industry can produce, regardless of price. d) the quantity of output that producers are willing to produce a

### 4908-microecon

Please assist me with the attached

### Total utility, marginal utility, and utility maximization

Can you please explain the concepts of total utility, marginal utility, and utility maximization. Can you please define diminishing marginal utility and illustrate with two real-life examples - one for a business and one for an individual?

### Question

Please explain the concepts of total utility, marginal utility, and utility maximization. Define diminishing marginal utility and illustrate with two real-life examples - one for a business and one for an individual?

### Cardinal & Ordinal Measurement & Cardinal Approach

Please see the attached file for full problem description. --- 1. Cardinal & ordinal measurement in shortcoming of Ic curve 2. optimum level of consumption in cardinal Approach.

### What is the difference between accrual-basis accounting and cash-basis accounting?

E2-1 On numerous occasions, proposals have surfaced to put the federal government on the accrual basis of accounting. This is no small issue. If this basis were used, it would mean that billions in unrecorded liabilities would have to be booked, and the federal deficit would increase substantially. Instructions (a) What is t

### Marginal Utility, Revenue, Elasticity of Demand Etc.

1. Given Equilibrium Price of A = \$20 Price of B = \$80 What is the Marginal Utility of product A divided by the Marginal Utility of product B? 2. Given: Total Revenue = \$3000 Quantity Sold = 50 Quantity Produced = 75 What was the price? 3. Given: At \$20 a hat 100 hats were sold. At \$21 a hat 95 hats were sold. Wha

### Price Indifference Curves

In the two good case, the level sets of the indirect utility fuction in the price space are sets of the form {(p1,p2) 'vertical line' v(p1,p2,y) = v0} for when v0 is an element in the set of real numbers These are sometimes called price-indifference curves. Sketch a possible map of price-indifference curves. Give separate

### Show indirect utility function is convex

Show that the indirect utility fuction v(p,y) = [x1(p,y))^rho + (x2(p,y))^rho]^1/rho is a quasi convex function of prices and income

### Utility and Indirect Utility Mathematical Proof

Consider the problems of maximizing u(x) subject to px = y and maximizing v(u(x)) subject to px = y, where v(u) is strictly increasing over the range of u. Prove that x* solves the first problem if and only if it also solves the second problem. This is what I got, however i dont think its entirely correct. To solve the

### Microeconomic Theory - lexicographic, cardinal/ordinal utility,envelope, Hotelling's lemma, utility maximization

1. In the context of the usual utility maximization problem involving n(>2) goods, prove that not all goods can be net complements and that at least one good must be normal. 2. Prove the envelope theorem and use it to derive Hotelling's lemma. 3. Explain: (a) Why lexicographic preferences do not yield a continuous uti

### Microeconomics help

Summary If George spends \$5 (total) a week on good X and good Y, and if the price of each good is \$1 per unit, then how many units of each good does he purchase to maximize utility? To maximize the utility, George has to spend all his money buying one type of good. Either he buys 5 units of good X or 5 units of good Y. Qu