Suppose that Claudia has a utility funciton for two goods X and Y, is U(X,Y) = 10X + 10Y. If the Price of X is $2 per unit and the Price of Y is $5 per unit, what is Claudia's optimal bundle of goods? What is her utility at this optimal level? If the Price of X is $4 per unit and the Price of Y is $3 per unit, what is Claudia's optimal bundle of goods? What is her utility at this optimal level? Total Income is Unknown

answer

watching

216

views

For unlimited access to Homework Help, a Homework+ subscription is required.

You have 0 free answers left.
Get unlimited access to 3.8 million step-by-step answers.

Get unlimited access

Already have an account? Log in

Trinidad TremblayLv2

30 Jun 2018

Unlock all answers

Get 1 free homework help answer.

Already have an account? Log in

Related questions

1. Caty consumes only goods X and Y . Her utility function is: U(X; Y ) = min{X; Y}. We

are given that PX = 3; PY = 6, and Caty's income is 18.

Calculate Caty's optimal consumption bundle, (X, Y). (Hint: Since Caty's indif-

ference curves are not smooth and \curvy", we cannot use MRS = MRT to solve

for the optimal bundle. Draw a diagram to see where Caty's optimal bundle must be

on her IC. How do you characterize this bundle mathematically?)

2. John consumes only goods X and Y . His utility function is: U(X, Y ) = X + 2Y . We are

given that PX = 3; PY = 3, and John's income is 30.

(a) Calculate the slopes of John's budget constraint and his indierence curves, as viewed

with Y as the vertical axis and X as the horizontal axis

(b) Calculate John's optimal consumption bundle, (X, Y). (Hint: Since John's indif-

ference curves are not smooth and \curvy", we cannot use MRS = MRT to solve for

the optimal bundle. Draw a diagram to see where the John's optimal bundle must

be on his IC. How do you characterize this bundle mathematically?)

An agents utility function is U(X,Y)= 2X+Y. The price of X is $5 and the price of Y is $2. The agent's total income is $100. What is the optimal bundle that maximizes utility?

cerisegoat310

A consumer with the utility function U(X, Y) = [X â 10] Y^(1/2) with an income of $100 to spend on good X (with price $1) and good Y (with price $15).

1 Express this consumerâs utility maximization problem, using the particulars of this problem.

2 Give two conditions that the consumerâs optimal bundle will satisfy, again using the particulars of this problem.

3 Find the two conditions for the consumerâs optimal bundle. Neatly show your work.

4 Find the demand function for good X for a consumer with the given utility function. In other words, resolve this problem only now leaving the prices and income as variables: pX, pY, and m. Neatly show your work.