Suppose Al is currently consuming five movies and two concerts per month. If his utility function is given by U = 15MC, where Mrepresents the number of movies seen and C represents the number of concerts attended, Al's total utility is equal to: 75 15 150 10 30
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- Consider a consumer that consumes 2 teaspoons of sugar with each cup of coffee. For each cup of coffee with sugar the consumer gains 10 utils. a)Write down the utility function that gives the total utility if the consumer consumes S teaspoons of sugar and C cups of coffee. The consumer has assigned £7 per week to be spent on drinking coffee with sugar. The current price of coffee is £0.50 per cup and each spoon of sugar costs £0.10. b)Calculate the optimal weekly consumption bundle for this consumer. c)Does the consumer view C and S as complements or substitutes?Please no written by hand and no emage Consider a consumer that consumes 2 teaspoons of sugar with each cup of coffee. For each cup of coffee with sugar the consumer gains 10 utils.a) Write down the utility function that gives the total utility if the consumer consumes S teaspoons of sugar and C cups of coffee. The consumer has assigned £7 per week to be spent on drinking coffee with sugar. The current price of coffee is £0.50 per cup and each spoon of sugar costs £0.10. b) Calculate the optimal weekly consumption bundle for this consumer.c) Does the consumer view C and S as complements or substitutes?A consumer has a utility function U(X,Y ) = X1/2 Y1/2 . Prices of the goods are pX = £10 and pY = £5, respectively, and the consumer has income M = £200 to spend on X and Y. Currently, she buys 2 units of good X and spends the rest of her income on good Y.a) Determine this consumer’s current utility level. b) Computetheconsumer’smarginalutilitiesofgoodsXandY. c) Explain why the consumer’s current consumption of goods X and Y is not optimal. Should she substitute X for Y or vice versa? The consumer’s marginal rate of substitution is MRS = Y/X.d) Determine this consumer’s optimal consumption of both goods. e) By how much does the consumer’s utility increase when she consumes the optimal bundle?
- If something has negative marginal utility, what happens to your total utilitywhen you consume it?John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke, or does he show increasing marginal utility for Coke? Supposethat John has $3 in his pocket. If Cokes cost $1 each and John is willing to spend one of his dollars on purchasing a first can of Coke, would he spend his second dollar on a Coke, too? What about the third dollar? If John’s marginal utility for Coke keeps on increasing no matter how many Cokes he drinks, would it be fair to say that he is addicted to Coke?The following gives the marginal utility of John’s consumption of three goods A, B and C.Unit of consumption MUaMUbMUc1202545218203031615244141018512815610612 Goods A, Band C costs ksh2, ksh1 and ksh3 respectively. How many units of each good should a consumer take to maximize utility with an income of ksh12
- Boyd has the following utility function: U= 100B /C where B represents books and C represents audio CDs Boyd currently consumes 46 units of good B and 36 units of good C. His total level of utility is (Enter a numeric response using a real number rounded to two decimal places.) 15 MacBook Air 80 esc F1 F2 F3 F4 F5 F6 F7 @ #3 $ % 1 2 3 4 7 8. Q W E Y tab S caps lock C V * 00 つ エ B LL D A.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?ceriuppose that Isaiah has a weekly fixed budget and spends it all on haircuts and ice cream. At his current combination arof consumption, the marginal utility of the last dollar spent on haircuts is greater than the marginal utility of the last dollar spent on ice cream. Has Isaiah maximized his utility? A C E Yes, because changing his current consumption combination will reduce his total utility B No, because he can increase his total utility by purchasing more haircuts and D fewer ice creams Yes, because he has purchased 2 goods in proportion so that he can get- the maximum utility from each Yes, because he purchased the maximum possible with a limited budget No, because he can increase his total utility by purchasing fewer haircuts and more ice creams
- Carol needs to decide how to spend her wealth on sh and chicken.For Carol, 1 lb of sh is equivalent to 2 lb of chicken. Her preferences2Intermediate Microeconomics NYUAD, Spring 2023can be represented by the utility functionu(x; y) = 2x + ywhere x is the quantity of sh (in lbs) and y is the quantity of chicken(in lbs). The consumption set is R2+.(a) Draw two typical indi erence curves for Carol, one correspondingto a utility level of u1 and one corresponding to a utility level u2,where 0 < u1 < u2. Make sure you label the slope of the indif-ference curves and the intercepts with the horizontal and verticalaxes.(b) Suppose the price of sh is $1:5 per lb and and the price of chickenis $1 per lb. Carol has $20 to spend on sh and chicken.(i) Draw Carol's budget set, labeling the slope and the interceptpoints clearly.(ii) How much sh and chicken will Carol choose to purchase?1) Suppose that Abel and Eden spend their incomes on two goods, food (F) and clothing (C).Abel’s preferences are represented by the utility function U(F,C)=10FC, while Eden’spreferences are represented by the utility function U(F,C)= 0.20F2C2A) With food on the horizontal axis and clothing on the vertical axis, identify on a graph theset of points that give Abel the same level of utility as the bundle (10, 5). Do the same forEden on a separate graph.B) On the same two graphs, identify the set of bundles that give Abel and Eden the samelevel of utility as the bundle (15, 8).C) Do you think Abel and Eden have the same preferences or different preferences? Explain 2. Graphically show the effect of an increase in price of Coca Cola on the demand of PepsiCola 3. Assume a budget line is drawn for two commodities: X on the x-axis and Y on the y-axis. Ifthe income of the consumer is 120 Birr, the y-intercept is 3, and the slope of the budget lineis -0.5 then determined the price of commodity…1. Doug consumes two goods, electricity, e, and a composite commodity z. Doug has the following utility function: U = z²-e Last week, he clicked on a Facebook ad and got free solar panels put on his roof! Now Doug has solar panels on his roof that generate 50 units of electricity per day. For the going price of electricity, if Doug demands more than 50 units of electricity, he can buy more at that price. If he demands less than 50 units, he can sell the extra electricity (50 - his consumption) back to the grid, and earn the going price as extra income. a. What are his Marshallian demand functions for e and z? b. Currently, Doug's income is $100 per day, the price of z is $1 and the price of electricity is $0.50. How much electricity is he consuming and what is his utility? (note, the utility numbers may get a bit large). C Calculate quantity demanded for electricity and his utility if the price of electricity rises to $1. And then calculate the quantity demanded and utility when the…
