Consider a consumer whose preferences are characterized by the utility function u(x, x) In x +...

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Consider a consumer whose preferences are characterized by the utility function u(x₁, x₂) In x₁ + x₂. This utility function is often used to represent the tastes of a consumer to whom good 1 is essential, while good 2 is not. Furthermore, the tastes represented by this utility function satisfy the five standard assumptions about tastes introduced in the lectures. Based on this information, answer the following questions (questions 1-5). Questions: 10. Which of the following maps of indifference curves could be the one associated with the utility function above? a UR b с = d 1. What is the value of the MRS at bundle (1,3)? [Hint: MU₁=1/x₁ and MU₂=1]. 2. What is the quantity of good 1 chosen by the consumer when p₁=$3, p2=$30 and 1=$60? 3. What is the quantity of good 2 chosen by the consumer when p₁-$3, p2-$30 and 1=$60? 4. Now suppose income decreases to /=$15 while prices remain p₁-$3 and p2=$30. What is the quantity of good 1 chosen by the consumer? 5. Suppose again income decreases to /=$15 while prices remain p₁=$3 and p2-$30. What is the quantity of good 2 chosen by the consumer? Consider a consumer whose preferences are characterized by the utility function u(x₁, x₂) In x₁ + x₂. This utility function is often used to represent the tastes of a consumer to whom good 1 is essential, while good 2 is not. Furthermore, the tastes represented by this utility function satisfy the five standard assumptions about tastes introduced in the lectures. Based on this information, answer the following questions (questions 1-5). Questions: 10. Which of the following maps of indifference curves could be the one associated with the utility function above? a UR b с = d 1. What is the value of the MRS at bundle (1,3)? [Hint: MU₁=1/x₁ and MU₂=1]. 2. What is the quantity of good 1 chosen by the consumer when p₁=$3, p2=$30 and 1=$60? 3. What is the quantity of good 2 chosen by the consumer when p₁-$3, p2-$30 and 1=$60? 4. Now suppose income decreases to /=$15 while prices remain p₁-$3 and p2=$30. What is the quantity of good 1 chosen by the consumer? 5. Suppose again income decreases to /=$15 while prices remain p₁=$3 and p2-$30. What is the quantity of good 2 chosen by the consumer?

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