Question: 2. Suppose an individual's preference ordering can be represented by the following utility function: u(x1,x2) = min {961,962}. (a) Sketch a few (two or three)

2. Suppose an individual's preference ordering can be represented by the following utility function: u(x1,x2) = min {961,962}. (a) Sketch a few (two or three) indifference curves for the individual. (Hint: the indifference curves should be \"L-shaped\".) (b) Suppose currently prices are p = (p1,p2) and her income is I. Would she be better off if the price of good two is halved so that p = (P1, %) or if her income is doubled to 21? Explain using carefully labeled graphs

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!

2 a) Given utility function U (C; R) = min (C; 2R); daily endowment of time 24h, price and wage pc= w = 1; nd optimal choice of C; relaxation time R and labor supply L. (three numbers, use secrets of...

This is my assignment The questions in this problem refer to the following game: Player 2 a. Determine if either player has any dominated strategies. If so. identify them. b. Does either player have...

give all Problem 1. Demand Bengt's utility function is U(x1, x2)= x1 + ln x2 x1 - stamps x2 - beer Bengts budget p1 x1 + p2 x2 = m p1 - price of stamps p2 - price of beer m - Bengt's budget a) What...

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...

man2 Exercise #1. Annas preferences over consumption bundles (x1,x2) are summarized by the utility function U (x1,x2) = x1 (x2 + 1)2. (a) Derive an algebraic expression for the marginal utility MU1...

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,...

,Include working please A perfectly competitive firm has a Cobb-Douglas production function f (X1, X2) = X1X2. Suppose that input prices are w1 = 1 and W2 = 1. The firm wants to find the cheapest way...

Hey, tutor It's a macroeconomic question t A perfectly competitive firm has a Cobb-Douglas production function f (X1, X2) = X1X2. Suppose that input prices are w1 = 1 and W2 = 1. The firm wants to...

Section A 1.Suppose that an individual with income I cares about two goods, X and Y . The price of the two goods is pX and pY . The individual has the following utility function: U(X,Y)=X^0.5 +Y^0.5...

Using the a d definition of the limit, prove that lim (r.y) (0,0) 5a2y+ ry? = 0. r2+ y?

Logica utilises contractors to install its software to end users. To facilitate the provision of these goods, the company provides a standard trade finance facility to these contractors. Explain how...

Given lim ? f ( x ) = 2 5 and lim x 7 g ( x ) = 3 , evaluate lim x 7 [ f ( x ) v e c ( g ) ( x ) 9 ] .

Jane is considering investing in three different stocks or creating three distinct two- stock portfolios. Jane considers herself to be a rather conservative investor. She is able to obtain forecasted...

1 Open the downloaded file, GolfSales.xlsx . Save the workbook as GolfSales_LastFirst using your last and first name. If a Security Warning message displays, click the Enable Editing button. 2 On the...

As an expert, you are permitted to opine regarding the ultimate issue. You are in court and are asked to testify as to whether the defendant's actions are consistent with a particular fraudulent...

Carl and Elizabeth Williams are married filing jointly. They are 45 and 40 years old, respectively. Their address is 19010 N.W. 135th Street, Miami, FL 33054. Additional information about Mr. and...

Which would you pick as a benchmark, and why? What is the benchmark amount? a. Identify and select the most appropriate financial statement benchmark for establishing overall planning materiality....

Identify and discuss the Competencies of Strategic Thinking.

1. Discuss the following statement: Everything is seen, heard and said by a subject, and accordingly is subjective.

1. This chapter is designed to give the reader an understanding of how the way a problem is framed is crucial for how it is perceived, both by the recipient of a message and the person who wants to...

5. How is communication affected by how we demarcate the boundaries of a problem?