utitility, Microeconomics

Assignment Help:
In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial utility maximizing quantities were, (X,Y): (75,75). In July 2011, the price of meal increased to 1500/= while the average price of other goods remained unchanged.The new utility maximizing quantities were (50,75). Attempt the following questions.

(a) To maintain utility constant an income adjustment brought the student to consume the basket (61,92). What are the income and substitution effects?

(b) Suppose the objective is to maintain purchasing power constant. Will utility be maximixed?

(c) In October 2011,the Higher Education Student''s Loan Board (HESLB) increased the allowance to 7500/= per day. Is this amount worth?

Related Discussions:- utitility

Explain why each of the following factors may influence the, Ask qExplain w...

Ask qExplain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the com

Iso curve, how do i make one on excel

how do i make one on excel

Average fixed cost, Average Fixed Cost (AFC): AFC is the fixed cost per uni...

Average Fixed Cost (AFC): AFC is the fixed cost per unit of output. AFC = TFC/y Since the TFC is constant throughout the short run, as y increases AFC will decline. Therefore

Demand schedule and demand curves, what is the combined total demand schedu...

what is the combined total demand schedule for Delgian cocoa beans that European and USA consumers buy

A period of deterioration, A Period of Deterioration: The entire perio...

A Period of Deterioration: The entire period was very difficult for India's BOP, partly because of slow growth of exports in relation to import requirements and partly because

What are price ceilings and price floors, 1. Explain what are price ceiling...

1. Explain what are price ceilings and price floors and how they effect the market for a good or service. Also show through graphs, if they cause any inefficiencies in a perfectly

Consumer surplus, Two consumers John and grayson like to transfer songs to ...

Two consumers John and grayson like to transfer songs to their phones from jose phone the table represents their willingness to pay and jose willingness to accept for each download

Demand forecasting, what will be the possible concequences if a large scale...

what will be the possible concequences if a large scale like Toyota place its new product in Indian market without having forecast the demand for its product

Write Your Message!

Captcha
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