Exam 4: Consumer Behavior

Suppose that the marginal utility of good X and good Y is given by the following equations: MU_X = 1/(X + 10) MU_Y = 1/Y

The utility function for a consumer is U = min{X, Y}. If the price of X is $10, the price of Y is $15, and the consumer has $200, this consumer will purchase _____units of X and _____units of Y in equilibrium.

Alice's utility function over toys (T) and games (G) can be expressed as U(T,G) = 2TG. Use calculus to determine whether Alice's indifference curves are convex.

Use the following to answer question: Figure 4.7 -(Figure 4.7) Which of these indifference curves is convex to the origin?

Joaquim has new babies at home , so he cares only about diapers and wipes. Joaquim's preferences are represented by U(D,W) = DW, where D is the number of diapers and W is the number of wipes that Joaquim purchases. Joaquim's preferences can also be represented by this utility function:

The additional utility obtained from consuming an extra unit of a good is called:

Use the following to answer question: Figure 4.5 -(Figure 4.5) Which of the following statements is TRUE?

Jimi's utility function for guitars (G) and haircuts (H) is U = 1.05GH. Eddie's utility function for guitars and haircuts is U = GH + H^0.5. Does Jimi or Eddie receive more satisfaction from consuming 10 guitars and 9 haircuts?

Parker consumes goods X and Y. Her utility function is U = XY, which means that MU_X = Y and MU_Y = X. Prove that Parker's utility function satisfies all four assumptions of consumer preferences.

Use the following to answer question: Figure 4.2 -(Figure 4.2) Joanne's utility function is U = TC, where T is baskets of tomatoes and C is bags of carrots. One of Joanne's indifference curves will go through points:

Use the following to answer questions 38-40: Figure 4.14 -(Figure 4.14) Suppose the budget constraint shifted from constraint 2 to constraint 1. What could have caused this change?

Suppose that Eugene cares only about action figures and ice cream. His utility function is U = A^0.33C^0.67, where A is the number of action figures he owns and C is the number of scoops of ice cream he eats. The price of action figures is $10, and the price of ice cream is $4. Eugene has a budget of $100. How can Eugene's utility maximization problem be expressed as a Lagrangian equation?

The consumer's budget constraint is $6 = 0.50G + P, where G is packs of gum and P is bags of pretzels. The marginal utility of pretzels is MU_P = G^0.5, and the marginal utility of gum is MU_G = 0.5G^-0.5P. The consumer's utility function is U = G^0.5P. the utility-maximizing bundle consists of _____ packs of gum and _____ bags of pretzels.

Alice's utility function over toys (T) and games (G) can be expressed as U(T,G) = 2TG. Can Alice's preferences also be represented by U(T,G) = 2T²G²?

Missy's utility increases with the size of her apartment. However, Missy is willing to sacrifice some apartment space if she can live closer to the beach. Draw Missy's indifference curves.

Phil's utility function is U = XY, where MU_X = Y and MU_Y = X. In Lancaster, Pennsylvania, Phil's income would equal $500, and the prices of good X and good Y are $5 and $5, respectively. In Washington, D.C., Phil's income would equal $800, and the prices of good X and good Y are $8 and $10, respectively. Where should Phil live? Show your work.

The three-legged Ork, a space creature from the universe Warhammer, wears 1 right shoe and 2 left shoes. Draw the Ork's indifference curves.

A consumer has $200 to spend on groceries and entertainment. The price of entertainment is $40 and the price of groceries is $20.

Which assumption(s) allow(s) us to draw indifference curves?

A consumer has U = X^0.5Y^0.5 for a utility function, with MU_x = 0.5 X^-0.5Y^0.5 and MU_y = 0.5 X^0.5Y^-0.5. If she has income of $100, the price of X is $5, and the price of Y is $10, this consumer will use _____units of X and _____units of Y in equilibrium.