Elmer's utility function is u(x, y) = min{x, y). a. If Elmer consumes 4 units of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Elmer's utility function is u(x, y) = min{x, y). a. If Elmer consumes 4 units of x and 3 units of y, his utility is 4. b. If Elmer consumes 4 units of x and 2 units of y, his utility is 4. c. If Elmer consumes 5 units of x and 2 units of y, his utility is 4. d. On the graph below, use blue points (circle symbol) to plot the indifference curve for Elmer that contains the bundles that he likes exactly as well as the bundle (4, 2). Line segments will automatically connect the points. e. On the same graph, use orange points (square symbol) to plot the indifference curve for Elmer that contains bundles that he likes exactly as well as the bundle (1, 1) and green points (triangle symbol) to plot the indifference curve that passes through the point (16, 5). Again, line segments will automatically connect the points. f. Starting at the origin on the graph, use purple points (diamond symbol) to plot the locus of points at which Elmer's indifference curves have kinks. What is the equation for this curve? x = y? g. On the same graph, use a red line (cross symbol) to show Elmer's budget line when the price of x is 1, the price of y is 2, and his income is 8. What bundle does Elmer choose in this situation? (4,2) y 20 18 16 14 12 10 8 6 2 4 8. 10 12 14 16 18 20 Help Clear All h. Suppose that the price of x is 10 and the price of y is 15 and Elmer buys 100 units of x. What is Elmer's income? 1,150.00 (Hint: At first you might think there is too little information to answer this question. But think about how much y he must be demanding if he chooses 100 units of x.) Graphs Tool 1.55 2002-2013 Cengage Learning. All rights reserved. 2. Elmer's utility function is u(x, y) = min{x, y). a. If Elmer consumes 4 units of x and 3 units of y, his utility is 4. b. If Elmer consumes 4 units of x and 2 units of y, his utility is 4. c. If Elmer consumes 5 units of x and 2 units of y, his utility is 4. d. On the graph below, use blue points (circle symbol) to plot the indifference curve for Elmer that contains the bundles that he likes exactly as well as the bundle (4, 2). Line segments will automatically connect the points. e. On the same graph, use orange points (square symbol) to plot the indifference curve for Elmer that contains bundles that he likes exactly as well as the bundle (1, 1) and green points (triangle symbol) to plot the indifference curve that passes through the point (16, 5). Again, line segments will automatically connect the points. f. Starting at the origin on the graph, use purple points (diamond symbol) to plot the locus of points at which Elmer's indifference curves have kinks. What is the equation for this curve? x = y? g. On the same graph, use a red line (cross symbol) to show Elmer's budget line when the price of x is 1, the price of y is 2, and his income is 8. What bundle does Elmer choose in this situation? (4,2) y 20 18 16 14 12 10 8 6 2 4 8. 10 12 14 16 18 20 Help Clear All h. Suppose that the price of x is 10 and the price of y is 15 and Elmer buys 100 units of x. What is Elmer's income? 1,150.00 (Hint: At first you might think there is too little information to answer this question. But think about how much y he must be demanding if he chooses 100 units of x.) Graphs Tool 1.55 2002-2013 Cengage Learning. All rights reserved. 2.
Expert Answer:
Answer rating: 100% (QA)
Elmer indifference curve is when utility function parameters are equal to each other ie X... View the full answer
Related Book For
Posted Date:
Students also viewed these economics questions
-
Suppose that your utility function is U = I. Compute the risk premium of the two lotteries described in Problem 15.7.
-
Ann's utility function is U = q1q2 / (q1 + q2). Solve for her optimal values of q1 and q2 as a function of p1, p2, and Y?
-
Bill's utility function is U = 0.5 ln q1 + 0.5 ln q2. What is his compensated demand function for q1?
-
The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company...
-
Refer to Exercise 16.11. a. Test to determine whether there is evidence of a linear relationship between distance to the nearest fire station and percentage of damage. b. Estimate the slope...
-
Solve \(169 x^{2}=25\) using the square root method.
-
The production budget for cars for May (in units) is a. 6,500 b. 11,000 c. 4,500 d. 10,100 Munch Enterprises makes a small toy car that is voice activated. Projected sales for the next four months...
-
An article in Quality Progress (For Starbucks, Its in the Bag, March 2011, pp. 18-23) describes using a central composite design to improve the packaging of one-pound coffee. The objective is to...
-
Solve 7 sin x=3 for the four smallest positive solutions
-
The U.S. Institute of Management Accountants has developed ethical standards for managerial accountants. Explain the importance of business ethics. Instructions Identify the four specific standards.
-
Compare and contrast the two talks: Talk 1: Mental health for all by involving all: Dr. PatelLinks to an external site. (11:57min) (subtitles)and Talk 2: Elyn Saks: A tale of mental illness -- from...
-
Brent received a report from the production and purchasing departments with the following values for August: Actual materials quantity: 6,200 pounds Total actual cost: $9,250 Standard materials...
-
Risk is the measure of uncertainty about the future payoffs of an investment, measured over certain time horizons and relative benchmarks. Question : Apply the definition of risk provided in the...
-
Discussing with team members the teams role in contributing to those objectives Identifying responsibilities of individual team members and how they can contribute to achievement of those objectives...
-
Many companies use stock options as a form of equity compensation-to motivate executives and key employees. Some stock option issuers have either backdated and/or repriced stock options. Backdating...
-
Paty Ltd operating containers and it is contemplating two cost structures for its operations. A. High variable cost pu container with lower annual fixed costs B. Lower variable cost with higher fixed...
-
Perfect Deplays designs and manufactures displays used in mobile devices Serious flooding throughout the region affected Perfect Displays facilities Inventory was completely ruined, and the company's...
-
Suppose that the laptop of Prob. 2.16 is placed in an insulating briefcase with a fully charged battery, but it does not go into sleep mode, and the battery discharges as if the laptop were in use....
-
Harvey Habits utility function is U (c1, c2) = min {c1, c2}, where c1 is his consumption of bread in period 1 and c2 is his consumption of bread in period 2. The price of bread is $1 per loaf in...
-
Sir Plus consumes mead, and his demand function for tankards of mead is given by D(p) = 100 p, where p is the price of mead in shillings. (a) If the price of mead is 50 shillings per tankard, how...
-
Lolita, an intelligent and charming Holstein cow, consumes only two goods, cow feed (made of ground corn and oats) and hay. Her preferences are represented by the utility function U(x, y) = xx2 /...
-
Sprague Company manufactures basketballs. Materials are added at the begin- ning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July...
-
(Target Costing) Driftwood Industries currently sells coffee tables for \($450\) each. It has costs per table of \($330.\) A new competitor is opening in the same mall as Driftwood and offers a...
-
Elite Company has several processing departments. Costs charged to the Assembly Department for November 2002 totaled $2,129,000 as follows. Production records show that 30,000 units were in beginning...
Study smarter with the SolutionInn App