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

International economics., GIVE AND EXPLAIN IN DETAIL,ARGUMENTS GIVEN TO EXP...

GIVE AND EXPLAIN IN DETAIL,ARGUMENTS GIVEN TO EXPLAIN LEONTIEF''S EMPERICAL FINDINGS ON THE HECKSCHER-OHLIN MODEL OF TRADE.

The hypothesis of inflation-unemployment trade-off, The Hypothesis of Infla...

The Hypothesis of Inflation-Unemployment Trade-off : This hypothesis about formation of expectations is therefore known as the hypothesis of adaptive expectations. The hypothes

Supply, concept of supply

concept of supply

Critique on earmarking, Critique on Earmarking Studying the working of...

Critique on Earmarking Studying the working of earmarking in many OECD (organisation of economic  cooperation and development) countries, Potter and Diamond (1999) pointed out

Point elasticity, Point elasticity: It refers to measurement of elasticity ...

Point elasticity: It refers to measurement of elasticity on a point On a demand curve. Point elasticity helps in measuring elasticity where change in price and quantity is infinite

What should be the appropriate growth rate in any country, What should be t...

What should be the decent/appropriate growth rate in any country?  Answer:   A growth rate of among 2-3% is considered normal for mature developed countries; for LICs, 5-7% is

Delphi techniques, This method is also known as Experts opinion methods of ...

This method is also known as Experts opinion methods of investigation. In this method instead of depending upon the opinion of buyers and salesmen firms can obtain views of the spe

Water resources , Normal 0 false false false EN-IN X-...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

TAXATION, WITH reference to incidence taxation,explain with the help diagra...

WITH reference to incidence taxation,explain with the help diagrams,who bears the incidence of taxation when the demand for a commodity is perfectly inelastic, perfectly elastic an

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