Compute the welfare loss to this consumer of change

Assignment Help Business Economics
Reference no: EM131162971

For a consumer with a utility function U(X1,X2)=X1(X1+X2)and a budget constraint P1X1+P2X2=m Compute the welfare loss to this consumer of a change in P2 to 2P2 both in terms of utility and money. Show the steps.

Reference no: EM131162971

Questions Cloud

Principal pillars of finance-banking and securities : Offshore banking is largely unprotected by the safety net national governments have imposed to prevent domestic bank failures. Compare and contrast international regulatory cooperation in the two principal pillars of finance: banking and securities.
Utility consists of consuming two ordinary goods : Suppose Mike’s utility consists of consuming two ordinary goods: Hotdogs (normal good) and beer (inferior good). Quantity and price for hotdogs and beer are Xh, Xb, Ph and Pb and his income is I. Draw Mike’s indifference curve, budget line and show t..
What are the long-term effects of rent ceilings : Who benefits from rent ceilings? Who suffers? What are the long-term effects of rent ceilings? How can landlords and tenants cheat on rent ceilings? Do you think the rent ceilings might lead to more discrimination against certain groups?
In each case draw two indifference curves : Draw a graph for each part with quantities of vegetarian pizza on the horizontal axis and quantities of meat lovers pizza on the vertical axis to illustrate the following situations. In each case draw two indifference curves and make a little arrow p..
Compute the welfare loss to this consumer of change : For a consumer with a utility function U(X1,X2)=X1(X1+X2)and a budget constraint P1X1+P2X2=m Compute the welfare loss to this consumer of a change in P2 to 2P2 both in terms of utility and money. Show the steps.
Calculating relevant elasticities : Suppose demand function for good 1 is X1=(2m)/(P1+2P2). Calculating relevant elasticities answer the following questions. Show your calculation. Is this good ordinary or Giffen?
What is consumer optimal consumption bundle after policy : A consumer consumes only food (X1) and alcohol (X2) and he has a utility function U(X1,X2)=bX1+aInX2. Derive the Hicksian demand function for good 1 (h1). Show that it is downward sloping in its own price. What is the new budget constraint? What is t..
Pull promotional strategy and push promotional strategy : Explain the difference between a “pull” promotional strategy and a “push” promotional strategy. Under what conditions should each strategy be used? Give an example of a 'Pull Strategy' that you have experienced.
Instituting massive quantitative easing program : Since 2009, the Federal Reserve has been unable to stimulate the US economy sufficiently enough to generate 3-5% annual growth in GDP,despite keeping shorts-term interest rates near zero and instituting a massive "quantitative easing" program. Why ha..

Reviews

Write a Review

Business Economics Questions & Answers

  By how much will unemployment change after you policy

The government wants to eliminate the inflationary gap by changing expenditures. What policy do you suggest? By how much will unemployment change after you policy has taken effect?

  Difference between a competitive firm and a monopoly firm

What is the main difference between a competitive firm and a monopoly firm?

  Tax increase or decrease the dead weight loss from monopoly

Consider the following possible schemes for taxing a monopoly: A proportional tax on profits. Explain how each of these taxes would affect the monopolist's profit-maximizing output choice. Would the tax increase or decrease the deadweight loss from m..

  Draw the new budget set and compare it to that in part

A consumer has $120 and faces prices px =$5 and py=$10. Draw its budget set. Suppose its income were to fall to $60. Draw the new budget set. Assume income is again $120, but the prices double to $10 and $20, respectively. Draw the new budget set and..

  Firm to minimize costs with more than factor of production

For a firm to minimize its costs with more than one factor of production, for every factor, the

  What is the total surplus and producer surplus

Suppose that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese.  The graph also shows that the minimum price at which a few of the producers are willing to sell is $0.06 per pound. In t..

  Money and lowering the interest rates to get consumers

If the central bank (the Federal Reserve) keeps printing money and lowering the interest rates to get consumers buy and businesses to borrow money, then the economy will improve. Do you agree with the statement?

  Qhere is the question i need help on suppose that in new

q.here is the question i need help on suppose that in new crankshaft pennsylvania the quality distribution of the 4 000

  No haggle sales policy

You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $2 million. What price should you charge for a midsized automobi..

  Measuring economies of scale calculate the value

A firm finds that at an output level of 7 units, its total cost is $1834; at 8 units of output, its cost is $2048. measuring economies of scale calculate the value of S for this firm at 8 units of output. Are there economies of scale at 8 units of ou..

  Crusty price discriminates between the two neighbourhoods

Crusty Cakes sells donuts in Eastown and Westown. Its total costs are given by TC = 10(Qe+Qw). The demand in each neighbourhood is given by Qe = 100 - 2Pe and Qw = 100 - Pw. If Crusty price discriminates between the two neighbourhoods, how much are i..

  Disadvantages of increased regulation for transportation

According to your textbook, the United States has attempted to set policies and establish regulations that are fair and equitable to both users and providers in the transportation industry. What are the advantages and disadvantages of increased regul..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd