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Please help with b and c good as 6 strawberries. (a) Draw two of Chris' indifference curves - one that passes consumption bundle (S1,B1)= (6,0)
Please help with b and c
good as 6 strawberries. (a) Draw two of Chris' indifference curves - one that passes consumption bundle (S1,B1)= (6,0) and one that passes (S2,B2)=(1,6). What is the relationship between the two goods from Chris' breakfast perspective? Find MRSS,B with help of your drawing. (b) Suggest two utility functions that describe Chris' utility! (Hint: Considering an additive relationship between B and S might help.) Now suppose further that 6 strawberries cost 2 and 1 banana costs 1. (c) Add exemplary budget lines to your graph from (a) for different budgets. How much bananas and strawberries will Chris consume at his optimal point of consumption ? Why or why not does the optimality condition of consumer choice hold? Now assume following scenarios: 1. Suppose demand for strawberries is given by S=216PS+2PB. A strawberry costs 0.5 and one banana costs 1. 2. Estimated cross-price elasticity of strawberries is 2 . (d) What is the cross-price elasticity of strawberry demand for 1 . and what is the percentage and quantity change in strawberry demand for 2. , if the banana price increased by 5% and the original strawberry demand was 20 . good as 6 strawberries. (a) Draw two of Chris' indifference curves - one that passes consumption bundle (S1,B1)= (6,0) and one that passes (S2,B2)=(1,6). What is the relationship between the two goods from Chris' breakfast perspective? Find MRSS,B with help of your drawing. (b) Suggest two utility functions that describe Chris' utility! (Hint: Considering an additive relationship between B and S might help.) Now suppose further that 6 strawberries cost 2 and 1 banana costs 1. (c) Add exemplary budget lines to your graph from (a) for different budgets. How much bananas and strawberries will Chris consume at his optimal point of consumption ? Why or why not does the optimality condition of consumer choice hold? Now assume following scenarios: 1. Suppose demand for strawberries is given by S=216PS+2PB. A strawberry costs 0.5 and one banana costs 1. 2. Estimated cross-price elasticity of strawberries is 2 . (d) What is the cross-price elasticity of strawberry demand for 1 . and what is the percentage and quantity change in strawberry demand for 2. , if the banana price increased by 5% and the original strawberry demand was 20Step by Step Solution
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