Post a New Question

economics

posted by .

1.. Suppose that U(x; y) = min(x; y) with px = 1 and py = 1. Describe and
illustrate the income and substitution effects of an increase in the price of
good y. What does this imply about a tax imposed on good y..

2.. Let U(x; y) = 5x:8y:2 showing all derivation work, find:
(a) the Marshallian demand functions for x and y
(b) the Indirect Utility Function
(c) the compensated demand functions xc and yc

3….. Suppose that Timmy just graduated from college and has two job offers in two distinct
cities. Timmy gains utility from only the consumption of goods x and y and has a utility
function U(x; y) = . In City A, Timmy would earn $50 and the prices of x and
y are $42 and $12, respectively. In City B, Timmy would earn $40 and the prices of x
and y are $32 and $8, respectively. Will Timmy take the job in City A or City B and
how much utility would he gain in each city

  • economics -

    none of the above

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. ECON Firm

    Suppose you have an industry with 20 firms and the CR is 30%. How would you describe this industry?
  2. Microeconomics

    1. The utility function is given by: U=x+y and the budget line is x+2y=100. Then the price of good x goes up to 4. Find the Hicksian substitution effect, income effect, and total change in demand for good x from the change --- Ok i …
  3. Micro Economics

    Briefly explain the following: (a)Economic cost and accounting cost. (b)Free market economy and mixed economy. (c)Marginal utility theory and indifference curves analysis. Please note that we don't do students' homework for them. Once …
  4. Economics

    The Own price elasticity of demand for good X is -2, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is -6. Determine how much the consumption of this good …
  5. Economics

    What is the computing? in terms of math Industry structure is often measured by computing the Four-Firm Concentration Ratio. Suppose you have an industry with 20 firms and the CR is 20%. How would you describe this industry?
  6. microeconomics

    Fact 1: "The substitution effect(SE) must ALWAYS be negative (i.e. goes in the opposite direction to the change in PRICE). The income effect(IE) can be either positive or negative." Fact 2: "SE and IE can go in the same direction or …
  7. economics

    suppose the income elasticity of demand for toys is +2.00. this means that a. a 10 percent increase in income will increase the purchase of toys by 20 percent b. a 10 percent increase in income will increase the purchase of toys by …
  8. Economics

    1. Using AD/AS, describe the short-run and long-run effects of an increase in the money supply on the equilibrium level of production and the price level. Be sure to explain what happens to Total Expenditures (using the 3 effects of …
  9. economics

    When the price of X is $1 and the price of Y is $1 and income is I, Joe Panther spends $100 on good X. One day Joe is walking down Downer street and is dismayed to discover that the price of good X has increased to $2. However, moments …
  10. economics

    Suppose average movie attendance is 250 million tickets when prices are $7 a ticket and 200 million when prices are $9 a ticket. Other things being equal, the data imply that the elasticity of demand for movie tickets is: A. elastic, …

More Similar Questions

Post a New Question