Derive with the help of indifference curves and the budget constraint the optimal consumption plan. How do you transfer the optimal consumption plan into an individual demand function?
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Derive with the help of indifference
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- Receive with the help of indifference curves and the budget outline the optimal consumption plan. How do you transfer the optimal consumption plan into an individual demand function?What are the determinants for an individual demand? Receive with the help of indifference curves and the budget outline the optimal consumption plan. How do you transfer the optimal consumption plan into an individual demand function?Assume you consume two goods, X and Y. Your utility function is U = 2X + 4Y. Let PX= $4, PY= $2, and assume that your income is $100. What's your optimal consumption of Y?
- Rhea is determining how many gallons of milk (M) and loaves of bread (B) to purchase. Use the information in italics to answer the bolded question below: Rhea's marginal utility function for milk: MUN • Rhea's marginal utility function for bread: M = 0.5M-2 MUB = 0.5MB-1/2 • Rhea has $60 to spend on bread and milk. • The price of milk (Pm) is $3/gallon of milk. • The price of bread (Pb) is $1/loaf of bread. • For the sake of computation, assume that bread is the horizontal axis good (i.e., good X) and milk is the vertical axis good (i.e., good Y). When you set up the optimal budget decision rule for Rhea's consumer problem, which of the following statements best describes how much she will buy of both goods at her consumer equilibrium? O For each gallon of milk, Rhea will buy 1/3 loaf of bread. O For each gallon of milk, Rhea will buy 3 loaves of bread. For each gallon of milk, Rhea will buy 1 loaf of bread. O For each gallon of milk, Rhea will buy 6 loaves of bread.Why does the optimal consumption bundle occur where the budget line is tangent to the indifference curve?suppose you have a fixed income of $3000 per month and you want to allocate your budget between two products: X and Y. Let's say the price of good x is $10 per unit, and the price of good y is $20 per unit. What is the budget constraint? Draw it on a graph and label the intercepts and the slope.
- What are the determinants for an individual demand? Derive with the help of indifferencecurves and the budget constraint the optimal consumption plan. How do you transfer theoptimal consumption plan into an individual demand function?Amanda consumes three different products: apple (x), orange (y) and banana (z). Her utility function is U=xy^2z^3. The prices of the products: px=20, py=30, pz=40. Her income that she spends for fruits is 3,000. How many apple (x), orange (y), and banana (z) does she buy in case of optimal consumption?What are the determinants for an individual demand? Derive with the help of indifferencecurves and the budget constraint the optimal consumption plan. How do you transfer theoptimal consumption plan into an individual demand function? (use graphs)
- Discuss how the utility-maximization model helps highlight the income and substitution effects of a price change.Jane's utility function is U=X^2Y^8 , with marginal utilities being MUX=2XY^8 and MUY=8X^2Y^7. Prices are PX=1 and PY=3. Jane's income is I=120. What is the optimal consumption of X?Suppose the utility function for goods x and y is given Utility = U(x,y) = xy +y Suppose price of both x and y is $1. You have total $10 to spend. Suppose price of x changed to $0.5. Price of y and your disposable income remain the same: a. calculates the change in the amount of good x, that is caused by the substitution effect (the effect on consumption due to a change in price holding real income or utility constant). b. calculate the change in the amount of good x, that is caused by the income effect (the effect on consumption due to a change in real income caused by a change in price).