1.Suppose you have a budget of 450 dollars for one month.You would like to buy some textbooks and CDs.The average cost of a book is 55 dollars each and that of a CD is 16 dollars each.Let x denote the number of books you buy and y denote the number of CDs that you buy.Write ...
Suppose that a person's preferences can be described by the utility function U = q_{1}^{\beta} q_{2}^{1 - \beta} where 0 less than \beta less than 1 . They have income Y and face prices p1 and p2. T a) Suppose a consumer has a utility f...
We have assumed that consumption depends only on disposable income. Now suppose that consumptions depend on both disposable income and interest rate. As interest rates increase, consumption decreases. a. If consumption suddenly begins to depend on the in ...
Suppose you have income of $12and faced prices of p^x=2and p^y=3,so that your budget constraint is given by: 12=2x+3y What is your utility maximizing combination of x and y? What is your total utility at this point? Suppose...