How much total utility does consumer receive

Assignment Help Microeconomics
Reference no: EM133248466

Suppose a consumer's utility function is given by U(X,Y) = X*Y. Also, the consumer has $180 to spend, and the price of X, PX = 4.50, and the price of Y, PY = 2.

a. How much X and Y should the consumer purchase in order to maximize her utility?

b. How much total utility does the consumer receive?

c. Now suppose PX decreases to 2. What is the new bundle of X and Y that the consumer will demand?

d. How much money would the consumer need in order to have the same utility level after the price change as before the price change?

e. Of the total change in the quantity demanded of X, how much is due to the substitution effect and how much is due to the income effect?

Reference no: EM133248466

Questions Cloud

Consumer demand equals producer supply : Explain how changes in prices result in an upward sloping supply. What will happen when consumer demand equals producer supply?
Apple iphone on display table with competing branded phone : Consider the Apple iPhone on a display table with competing branded phones. The Apple logo is highly recognisable above the competing phones' logos.
Small cars become more fashionable : Small cars become more fashionable. Consumers anticipate that the price of small cars, will decrease substantially in the near future.
What interpretation can we give to phenomenon : What interpretation can we give to this phenomenon? It is true that economic welfare in the United States would have multiplied by 2.85?
How much total utility does consumer receive : How much X and Y should the consumer purchase in order to maximize her utility? How much total utility does the consumer receive?
Maynard keynes economic principles : Distunguish adam smith's, karl max's and john maynard keynes economic principles. How it applies to the philippines' current economic system
Why does government require occupational licenses : Why does the government require occupational licenses? how would the free market determine which barbers are qualified?
Aggregate demand and aggregate supply : Compare and contrast Keynes' Law and Say's Law as they relate to aggregate demand and aggregate supply.
Fallen human nature : What functions does government have to undertake because of fallen human nature ?

Reviews

Write a Review

Microeconomics Questions & Answers

  Calculate the amount by which the demand curve

If the multiplier for taxes is -1.30 and taxes are increased by ?$120 ?billion, calculate the amount by which the demand curve will ultimately shift.

  Profits of monopoly in long run

Describe how a firm in a Monopoly market maximizes its profits and minimizes its losses in the short term and in the long term. Can a Monopoly make a profit in the long term?

  What is the value of the product or service to the buyer

What is the value of the product or service to the buyer? Are there established price points for products or services in this area? What discounts should be offered to trade customers, or to other specific segments of your market?

  What is the weakest argument fixed versus floating exchange

In the debate on fixed versus floating exchange rates, the strongest argument for a floating rate is that it frees macroeconomic policy from taking care of the exchange rate.

  What are the common defenses of protectionism

How does Mancur olson explain differences in economic performance of nations by the concept of public goods?

  Present a plan for monitoring carbon monoxide in a city

Present a plan for monitoring carbon monoxide in a city

  Have any of the assumptions necessary for a valid analysis

Is there sufficient evidence to indicate a dependence between the authorship assignment and the input of the faculty advisor as judged by faculty members? Test using α=.01.

  Solving problem related to the protest

Occupy Wall Street was a national (and later global) organized protest against the greed, bank profits, and financial corruption that led to the 2008-2009.

  Estimate of the treatment on the treated

Economics 706 - Problem Set 2. Use matching to construct an estimate of the treatment on the treated. First you must choose some rule to decide what to do if there is more than one available match. Explain what that is as part of your answer

  Explain the contemporary foreign trade policy issue

Complete a project of 3,000 words based around a contemporary foreign trade policy issue involving a dispute which has been adjudicated at the WTO.

  What does the annual report say about the corporations view

What does the annual report say about the corporation's view of future business challenges and the market in which it operates?

  Effective group facilitator qualities

1. What qualities of effective group facilitators do you have and which would you like to develop?

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