Ray''s indifference curves corresponding to the utility

Ray''s indifference curves corresponding to the utility level

Reference no: EM13884798

1. Ray Starr has the utility function U(x,y)=y/(100-x)

a. Does Ray prefer more to less of both goods?

b. Draw a diagram showing Ray's indifference curves corresponding to the utility levels U=1/2, U=1, and U=2

c. How can you describe the set of indifference curves for Ray? Is the utility homothetic?

d. If the price of x is $1 and the price of y is $1, find Ray's demand for x as a function of his income and draw a diagram showing his Engel curve for x.

Identify the choice that best completes the statement or answers the question.

____ 1. In Ozone, California, people all have the same tastes and they all like hot tubs. Nobody wants more than one hot tub but a person with wealth $W will be willing to pay up to $.01W for a hot tub. The number of people with a wealth greater than $W for any given W in Ozone is approximately 1,000,000/W. The price elasticity of demand for hot tubs in Ozone, California, is

a.	?0.1.
b.	?0.01.
c.	?1.
d.	?0.4.
e.	none of the above.

____ 2. Dr. Social Science has recently figured out how to clone consumers. His first effort was done on the population of Walla, Washington. Each original citizen got a clone who had exactly the same income and preferences. Which of the following statements describes what happened to the demand function for tuna-fish casseroles in Walla?

a.	The elasticity doubled and the slope remained constant.
b.	The elasticity did not change at any price.
c.	The elasticity of demand doubled and the slope doubled.
d.	The elasticity halved and the slope remained constant.
e.	none of the above.

____ 3. At the price of $100, tourists demand 267 airplane tickets. At the same price, business travelers demand 237. At the price $110, tourists demand 127 tickets and business travelers demand 127. Assuming that the demand curves of business travelers and tourists are both linear over this price range, what is the price elasticity of demand at the price $100?

a.	?4.96
b.	?25
c.	?5.46
d.	?0.05
e.	none of the above.

Reference no: EM13884798

Questions Cloud

Differences between staffing for a stand-alone behavioral : Describe the similarities and differences between staffing for a stand-alone behavioral healthcare facility

Calculation of pension liability according to balance sheet : Foster Corporation received the following report from its actuary at the end of the year: The amount reported as the pension liability on Foster's balance sheet at December 31, 2012 is

How do you calculate the marginal rate of substitution : How do you calculate the marginal rate of substitution?

Calculate the equilibrium composition : Methanol can be manufactured by the gas phase reaction CO(g) + 2H2(g)?CH3OH(g)at 400K and 1.013 bar.The following data are available;?H298= -90.71 kJ/mol?G298= -24.33 kJ/mol.

Ray''s indifference curves corresponding to the utility level : 1. Ray Starr has the utility function U(x,y)=y/(100-x) a. Does Ray prefer more to less of both goods?b. Draw a diagram showing Ray's indifference curves corresponding to the utility levels U=1/2, U=1, and U=2

Explain the immune system''s role in protecting the body from : Explain the immune system's role in protecting the body from disease

Finding reactor size for adiabatic operations : Explain the graphical design procedure for finding the reactor size for adiabatic operations ofPlug flow and Mixed flow reactors.(May-2005 & Dec-2005) and The flowthrougha tubularreactor, inwhicha first order irreversible liquid phase reaction tak..

Will charge a price equal to the marginal cost : Will charge a price equal to the marginal cost.Will charge the highest prices to those customers with the least elastic demand.Will capture all of consumer surplus as profit for the firm.Will charge the highest prices to those customers with the most..

What is the structure''s angular velocity : Far out in space, a mass m1=148300.0 kg rocket and a mass m2= 245000.0 kg rocket are docked at opposite ends of a motionless 87.0m long connecting tunnel.

User Account

All Pages