Refer to the below budget constraint figure. The consumer spends her money either on electricity or for internet data. If the price of internet data doubles. The consumer's new budget constraint Electricity 12 11 12 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Internet will start from the same point on the Electricity axis, but will cross the Internet axis at 3 will start from the same point on the Internet axis, but will cross the Electricity axis at 5 will start from the same point on the Internet axis, but will cross the Electricity axis at 20 will start from the same point on the Electricity axis, but will cross the Internet axis at 12

Refer to the below budget constraint figure. The consumer spends her money either on electricity or for internet data. If the price of internet data doubles. The consumer's new budget constraint Electricity 12 11 12 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Internet will start from the same point on the Electricity axis, but will cross the Internet axis at 3 will start from the same point on the Internet axis, but will cross the Electricity axis at 5 will start from the same point on the Internet axis, but will cross the Electricity axis at 20 will start from the same point on the Electricity axis, but will cross the Internet axis at 12

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.3P

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Mega Partner is selling two products Marker(m) and Eraser(e) and their budget is given with thefollowing equation: 15Qe+ 30Qm= 3000. Now answer the following questions. I. Draw the budget line for Mega PartnerII. What would be the highest amount spend on Marker with the existing budgetIII. If Total budget increases to 4500 what would be the new budget line (use diagram)IV. If Price of the Marker becomes 15, how this changes the existing budget line keeping allthe values remain same.
On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according tothe functionU(c, b) = 20c− c²+ 18b − 3b²a. How many cigars and glasses of brandy does he consume during an evening? (Cost isno object to J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum ofglasses of brandy and cigars consumed to 5. How many glasses of brandy and cigarswill he consume under these circumstances?
Please no written by hand and no emage Consider a consumer that consumes 2 teaspoons of sugar with each cup of coffee. For each cup of coffee with sugar the consumer gains 10 utils.a) Write down the utility function that gives the total utility if the consumer consumes S teaspoons of sugar and C cups of coffee. The consumer has assigned £7 per week to be spent on drinking coffee with sugar. The current price of coffee is £0.50 per cup and each spoon of sugar costs £0.10. b) Calculate the optimal weekly consumption bundle for this consumer.c) Does the consumer view C and S as complements or substitutes?
Sabine loves to support her local sports teams. She has an annual budget of $400 to divide between basketball games and football games. Tickets to a basketball game cost $25, and tickets to a football game cost $100. вс, Football games BC, 3 1 - 8 12 16 20 24 28 32 Basketball games reset a. Graph Sabine's budget constraint for basketball games and football games. Use the tool provided (BC1) and draw only the endpoints such that the first point touches the vertical axis and the second point touches the horizontal axis. b. Suppose the basketball team has a losing season and decides to decrease the price of a ticket to $20. Draw Sabine's new budget constraint.Use the tool provided (BC2) and draw only the endpoints such that the first point touches the vertical axis and the second point touches the horizontal axis. c. After the price decrease from (b), what will happen to Sabine's consumption of basketball and football games? According to the income effect, the quantity of basketball games…
7. Bob receives utility from days spent traveling on vacation domestically (D) and daysspent traveling in a foreign country (F) as given by the utilityU(D; F) = DFThe price of a day spent traveling domestically is 160 pounds and in a foreigncountry 200 pounds. Bobís annual budget for traveling is 8000 pounds. (a) Find Bobís utility maximising choice of days traveling domestically and of daystravelling in a foreign country. Find also his utility level from consuming thatbundle. Suppose that the price of domestic traveling increases to 250 pounds per day.Denoting his budget for traveling x, (suppose by now that it is unknown) findthe demand for D and F under the new prices as a function of x.
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Total utility (utils) 0 80 120 148 160 155 Quantity consumed per day 0 1 2 3 4 5 As shown in Exhibit above, the marginal utility for the second unit consumed is
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EXERCISE 7 Aisha is considering how to allocate the next 6 hours of her free time. She could choose between leisure (L) and helping her neighbour with the house chores. If she decides to help her neighbour, she is going to get paid at £25 per hour, which she can then spend on her favourite pizza (P). Suppose the price of pizza is £12.50. Aisha's preferences for leisure and pizza are given by the following utility function: U(L, P) = 3L + P. (MU₁ = 3, MUp = 1). a) Write down Aisha's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. b) Calculate Aisha's marginal rate of substitution between leisure and pizza. Explain the concept of MRS and interpret the figure obtained. c) Find Aisha's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. d) Would Aisha's optimal choice change if she could get a discount on her pizza purchases so…