Question: 1. Consider the utility function U(x, y) = 6x + 4y. MUx=6. MUy=4. a. Is the assumption that more is better satised for both goods?

1. Consider the utility function U(x, y) = 6x + 4y. MUx=6. MUy=4. a. Is the assumption that more is better satised for both goods? Why? Explain. b. Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. Does the marginal utility of y diminish, remain constant, or increase as the consumer buys more y? Explain. c. What is MRSx, y? d. Is MRSx, y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? e. On a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve. Indicate on your graph whether the indifference curve will intersect either or both axes. 2. Devin always drinks his 8 oz of Diet Coke with 2 oz of Captain Morgan. Each beverage drank in this way provides Devin 15 units of utility. Excess Captain Morgan or excess Diet Coke do not add to Devin's utility. Explain the nature of Devin's utility function (cg, what kind of utility inction is this? What is the functional form?), and indicate the form of his indifference curve map (e.g., graph his indifference curves)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Problem 1 Consider the utility function U (x, y) = xy + x, with M Ux = y + 1 and M U3, = x. (Verify these.) a. is the assumption of \"more is better\" (non-satiation) satised for both goods x and y?...

1. Which of the following is NOT an assumption about how the preference relations work? a) completeness b) reflexivity c) transitivity d) monotonicity 2. If two indifference curves cross itself this...

Thanks in advance Exercise #1. [10 pts.] A monopolist has an inverse demand curve ven by p(y) = 12-y and a cost curve given by c(y) = y". Describe how to determine its profit-maximizing level of...

He lp m eo u tpl e a se : Questions.,, 4. Which of the following will not shift either the demand or supply curve? 3. Changes in production costs b. Changes in consumer tastes c. Changes in the price...

Eco nomics Human lCapital Model: Fieinterpretthe human capital growth model as follows: Suppose there are two groups of people in a country, the lowskilled and the highskilled, where the lowskilled...

1Answer the following parts.. Human lCapital Model: Fieinterpretthe human capital growth model as follows: Suppose there are two groups of people in a country, the lowskilled and the highskilled,...

Exercise #1. Andy consumes two goods: food (measured in dollars) and other things (also measured in dollars). Let x1 be the amount that Andy spends on food in a given month and let *2 be the amount...

.77777 its a complete question help me please.... 1 . Consider a pure exchange economy with two consumers (A and B) and two goods (X and )). The utility functions for the two consumers are...

Economics assignment, help me tutors.44 it complete please. 1 . Consider a pure exchange economy with two consumers (A and B) and two goods (X and )). The utility functions for the two consumers are...

RISK AND RETURN Assume that you recently graduated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc., a large financial services corporation. Your first...

If we have 2 vectors U = (2, -1) and V = (1, 2) a) 3/2 b) U + 2 c) U / | U | must be replaced in each of those

Shenira is a resident of the Republic. She is 30 years old. She is married in community of property. Her husband did not earn any passive income. The following information relates to the 2021 year of...

1.15 Six independent coin tosses result in HHHHHH. It turns out that if the coin is fair, the probability of this outcome is (1/2)6 = 0.015625. Does this produce strong evidence that the coin is not...

Deliberate upon the consequences of the lack of creativity among university graduates, within organizations/companies and within our communities/societies.

3. Avoid making mistakes when reaching our goals

4. Achieve our positive goals (1 and 3 are motivated by avoiding the negative, while 2 and 4 are motivated by the positive). b. Initiative: When I communicate with others, I think it is very...

18. In the statements below, put a cross for the statement you feel characterizes yourself best when you communicate with others. Its not necessarily the way you know you should communicate, but the...