Maximization to trace out pikachus demand curve

Reference no: EM133706892

Directions: Each question gives you a scenario and asks you to graph, and/or analyze certain concepts from our lectures on Preferences and Utility Maximization.

1. Pikachu has an income of $200. Pikachu is going to the market with his income and will purchase ketchup ($4 per bottle) and apples (82 per apple). Draw Pikachu's budget line, and label bundles of ketchup and apples that are affordable and not affordable. Label important parts of the graph like how much ketchup Pikachu and purchase if he purchases no apples and how many apples he can purchase if he purchases no ketchup. Pikachu likes ketchup and apples about equally well and his preferences over the two are convex (Cobb-Douglass). Draw an example indifference curve and label the region with bundles of ketchup and apples that Pikachu prefers to the ones on the indifference curve, and label the region where points are less preferred compares to the ones on the indifference curve. Now draw Pikachu's budget line on the same graph with the indifference curve that contains his utility maximizing point. Show how Pikachu's consumption changes if the price of apples increase to $3 and Pikachu's income increases to $220. With this new income ($220) and assuming the price of apples is fixed at $3, use utility maximization to trace out Pikachus demand curve for ketchup.

Reference no: EM133706892

Questions Cloud

List and explain three kinds of measures you propose : List and explain three kinds of measures you propose to prevent the recurrence of previous financial crises such as the ones that took place in 2005?

Create a assessment report with professional language : You have been tasked to create a 2 to 3 page assessment report, with professional language, and use proper spelling/grammar, for management.

Average fixed cost will at this quantity : when quantity of output equals four units, then average fixed cost is $ As quantity of output increases, average fixed cost will at this quantity

Summarize the demographic trends in aging adults : Summarize the demographic trends in aging adults in North America. Compare and contrast Depression, Delirium and Dementia in the aging adult.

Maximization to trace out pikachus demand curve : With this new income ($220) and assuming the price of apples is fixed at $3, use utility maximization to trace out Pikachu's demand curve for ketchup

Difference between delirium-dementia : What are your priorities? Please address the difference between delirium and dementia as it applies to this case. Discuss key education components.

Discuss the purpose of the risk plan and risk identification : Discuss The purpose of the risk plan, Risk identification, Risk analysis and Risk monitoring, controlling, and reporting.

Does this competitive bundle maximize social welfare : Does this competitive bundle maximize social welfare? Find one allocation that would improve the overall social welfare based on this function.

Describe the roles and responsibilities of systems analyst : Describe roles and responsibilities of systems analyst, software developer, executive sponsor and end-user in information technology project life cycle.

User Account

All Pages