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

Assignement, need help for my micro assignment

need help for my micro assignment

Explain the duality between direct and indirect utility, Explain about the ...

Explain about the duality between direct and indirect utility. Duality between Direct and Indirect Utility: While seen how one can recover an indirect utility function by ob

Explain the factors influencing the value of ped and yed, Explain the facto...

Explain the factors influencing the value of PED and yED. PED and YED should be explained and then dealt with in terms of determinants. PED is dependent on availability/closene

What is cost push inflation, What is Cost Push Inflation Cost Push Inf...

What is Cost Push Inflation Cost Push Inflation :    When a cost of production (e.g. wages) enhances and firms put up prices to maintain profits. Cost increases may occur beca

Rational expectations and economic theory, RATIONAL EXPECTATIONS AND ECONOM...

RATIONAL EXPECTATIONS AND ECONOMIC THEORY  : Much of undergraduate macroeconomic theory is discussed on the assumption that, in the short run, the expectations of economic age

Income elasticity of demand, what are the practical importance of income el...

what are the practical importance of income elasticity of demand?

Price theory, what are the microeconomic encompasses

what are the microeconomic encompasses

COST FUNCTION, A firm has two plants. One plant produces according to a cos...

A firm has two plants. One plant produces according to a cost function cl (91) = Yf. The other plant produces according to a cost function c2(y2) = Yg. The factor prices are fixed

Comparative economics system, Identify path of growth and development to ec...

Identify path of growth and development to economic maturity.

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