his indifference curves are q E 91: quantity of energy demanded. We are exploring Jasen's preference...

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his indifference curves are q₁ E 91: quantity of energy demanded. We are exploring Jasen's preference for energy consumption in this question. Two of = 20 - 4√2 are q₁ = 24-4√92. Consider the following notation: 92: quantity of composite good (non-energy) demanded. P₁: price of unit energy P₂: price of unit composite good I: income of consumer (i) (ii) (iii) (iv) Plot both indifference curves (with properly labelled X and Y axis, and legends). Based on the indifference curves, what is the utility function of Jasen? As you can verify, Jasen is indifferent between the bundle (q₁ = 10.92 = 9) and the bundle (9₁= 2.92 = 25). If you doubled the amount of each good each bundle, you would have bundles (q₁= 20,q2 = 18) and (9₁ = 4,92 = 50). Are these two bundles on the same indifference curve? Please justify your answer. What is Jasen's marginal rate of substitution when he consumes the bundle (q₁ = 10,92 = 9)? (Give a numerical answer) his indifference curves are q₁ E 91: quantity of energy demanded. We are exploring Jasen's preference for energy consumption in this question. Two of = 20 - 4√2 are q₁ = 24-4√92. Consider the following notation: 92: quantity of composite good (non-energy) demanded. P₁: price of unit energy P₂: price of unit composite good I: income of consumer (i) (ii) (iii) (iv) Plot both indifference curves (with properly labelled X and Y axis, and legends). Based on the indifference curves, what is the utility function of Jasen? As you can verify, Jasen is indifferent between the bundle (q₁ = 10.92 = 9) and the bundle (9₁= 2.92 = 25). If you doubled the amount of each good each bundle, you would have bundles (q₁= 20,q2 = 18) and (9₁ = 4,92 = 50). Are these two bundles on the same indifference curve? Please justify your answer. What is Jasen's marginal rate of substitution when he consumes the bundle (q₁ = 10,92 = 9)? (Give a numerical answer)

Answer rating: 100% (QA)

iTo plot the indifference curves for Jasens preferences we need to use the given indifference curves q 204qz and q 24492 We can rewrite these equations to solve for q the quantity of composite good demanded in terms of q the quantity of energy demanded For the first indifference curve q 20 4q q 20 q4 q 20 q4 q 100 40q q16 For the second indifference curve q 24 4q q 24 q4 q 24 q4 q 144 48q q16 Now we can plot these indifference curves on a graph with q on the Yaxis and q on the Xaxis We will also need to choose some specific values for P P and I to use as reference points on the graph Lets assume P 1 P 1 and I 100 With these assumptions we can calculate the intercepts of each indifference curve For the first indifference curve q 100 40q q16 When q 0 q 5 When q 0 q 625 For the second indifference curve q 144 48q q16 When q 0 q 6 When q 0 q 9 We can now plot the indifference curves using these intercepts and the equations we derived earlier Jasens indifference curves The blue curve represents the indifference curve q 204q and the orange curve represents the indifference curve q 24492 ii To find Jasens utility function we can use the fact that his indifference curves satisfy the equation ... View the full answer