Part I: 1. Demand: D(P) = 100 - 2P The price of this good changes from...
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Part I: 1. Demand: D(P) = 100 - 2P The price of this good changes from P = 30 to P = 20. a. Calculate the Change in consumer surplus b. Calculate the Price Effect. c. Calculate the Quantity Effect. 2. Demand: D (P) = 200- 0.5P a. Calculate the amount of consumer surplus when P = 240. b. Calculate the amount of consumer surplus when P = 300. c. Calculate the Price Effect of the change in price from P = 240 to P = 300. d. Calculate the Quantity Effect of the change in price from P = 240 to P = 300. Part II: 1. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 4X + 4y = 60 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to P, = 6. b. Calculate the compensating variation. c. Calculate the equivalent variation. 2. Utility Function: U(X,Y)= X¹/2Y¹/2. Budget Constraint: 2X + 4Y = 90 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to Px = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation. 3. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 3X + 8y = 72 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to P, = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation. 4. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 2X + Y = 16 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to Px = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation. Part I: 1. Demand: D(P) = 100 - 2P The price of this good changes from P = 30 to P = 20. a. Calculate the Change in consumer surplus b. Calculate the Price Effect. c. Calculate the Quantity Effect. 2. Demand: D (P) = 200- 0.5P a. Calculate the amount of consumer surplus when P = 240. b. Calculate the amount of consumer surplus when P = 300. c. Calculate the Price Effect of the change in price from P = 240 to P = 300. d. Calculate the Quantity Effect of the change in price from P = 240 to P = 300. Part II: 1. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 4X + 4y = 60 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to P, = 6. b. Calculate the compensating variation. c. Calculate the equivalent variation. 2. Utility Function: U(X,Y)= X¹/2Y¹/2. Budget Constraint: 2X + 4Y = 90 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to Px = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation. 3. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 3X + 8y = 72 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to P, = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation. 4. Utility Function: U(X,Y)= X¹/2y¹/2. Budget Constraint: 2X + Y = 16 a. Calculate the utility maximizing amount of X and Y. Now suppose that the price of X changes to Px = 4. b. Calculate the compensating variation. c. Calculate the equivalent variation.
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Part I 1 Demand DP 100 2P a Change in consumer surplus Consumer Surplus P1 to P2 DP P dP Consumer Surplus 20 to 30 100 2P P dP Consumer Surplus 20 to 30 100 3P dP Consumer Surplus 100P 3P22 evaluated ... View the full answer
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