Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Elmers 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 Elmers indifference curves have kinks. what is the equation for this curve? x = y 2 g. On the same graph, use a red line (cross symbol) to show Elmers 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? | (42) 

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.

Step by Step Solution

3.39 Rating (149 Votes )

There are 3 Steps involved in it

Step: 1

Elmer indifference curve is when utility function parameters are equal to each other ie X... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Microeconomics

Authors: Hal R. Varian

9th edition

978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968

More Books

Students also viewed these Economics questions

Question

Define belongingness, competence, and autonomy.

Answered: 1 week ago