Anios utility function for the goods x and y is uxy 2

Assignment Help Econometrics

Reference no: EM13378888

Antonio's utility function for the goods X and Y is U(X,Y)= 2( $\sqrt(X)$ + $(Y)$ ).

A. What is the MRSxy? What is the MRSyx?

B. Is this a well behaved utility functions?

C. If M=$1800 and both goods cost $1 per unit, what is the optimal bundle? Now suppose the price of good X rises to $2.

D. What is the new optimal bundle?

E. What is the compensating variation for this price change?

F. Decompose the uncompensated effect of the increase in price into substitution and income effects

H. If you used the uncompensated demand curve to calculate the change in consumer surplus, would your calculation be too high or too low?

I. Provide a graph showing the initial outcome, the outcome after price change, the income effect, the substitution effect, and the uncompensated effect of the price change

Reference no: EM13378888

Questions Cloud

Suppose a simulation model has two random variables eg : suppose a simulation model has two random variables eg. arrival time andservice time in a queuing problem.nbsp what is

Value of perfect and sample informationa firm is : value of perfect and sample informationa firm is considering the marketing of a new product which will either be a

What is the key assumption needed to show how one can : what is the key assumption needed to show how one can construct a numerical utility function out of just a preference

Bayesian revision of probabilitiesthe manager of abc co is : bayesian revision of probabilitiesthe manager of abc co. is concerned that a competing firm might be planning to

Anios utility function for the goods x and y is uxy 2 : antonios utility function for the goods x and y is uxy 2 sqrtx y .a. what is the mrsxy? what is

Bayesian revision of probabilitiesseepage from dams : bayesian revision of probabilitiesseepage from dams containing uranium tailings is known to cause radio-active

A two-year-old child is eating raisins one at a time from a : a two-year-old child is eating raisins one at a time from a large box. even though the child doesnt understand formal

Decision analysis complete uncertaintya a decision maker : decision analysis complete uncertaintya a decision maker has formulated the following payoff profits

The demand curve and supply curve for a one-year discount : the demand curve and supply curve for a one-year discount bonds with a face value of 1000 are represented by the

User Account

All Pages