Explain the concept of more is better satisfied for both

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1. Compute the elasticity of demand give the demand curve: Q = 120 -2P +4Y at the point where P = 10 and Q = 20. Construe your results.

Brenan's preferences for chocolate gelato and mango gelato are characterized by the utility function U(C, M) = C1/3 M2/3 Where C denotes scoops of chocolate gelato and M represents scoops of mango gelato.

a. Explain the concept of more is better satisfied for both goods?

b. Elucidate as C increases the MUC increase, decrease or remain constant?

c. Analyze Brenan's MRSC, M.

d. Elucidate as C increases the MRSC, M increase, decrease or remain constant?

e. Would Brenan rather have four (4) scoops of C and two (2) scoops of M or two (2) scoops of C and four (4) scoops of M? Elucidate.

Camille's utility function is given by U = 2X + 5Y.

a. Sketch two of Camille's indifference curves. Make sure all relevant pieces of information are identified in your diagram.

b. Is the concept of "more is better" satisfied for both goods? Elucidate.

c. In non-technical terms, what does the MRSX,Y for this utility function tells us?

Reference no: EM1346423

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