The utility function U(X, Y) = X + Y satisfies all but one of the axioms of preference discussed in class. Which one is not satisfied and explain why.

/in /by

The utility function U(X, Y) = X + Y satisfies all but one of the axioms of preference
discussed in class. Which one is not satisfied and explain why.

You might also like
1. Wonder Ltd rents office space from a landlord at N$ 45 000 per month. It uses this space to run a business selling pharmaceutical products. At 31 October 2020, it pays the rent for November 2020. Required: From Wonder perspective, prove that this payment is an asset as at 30 October 2020. (7 marks) 2. Chapter 2 of the conceptual Framework clarifies what makes financial information useful, that is, information must be both relevant and must faithfully represent the substance of financial information.
Suppose the total utility function of a consumer is given by TU(x) = 2x 2 . What is the marginal utility of X?
Explain the THREE instruments of monetary policy. With the use of appropriate economic models, explain and illustrate how the Central Bank can achieve an increase in real GDP with the use of three of the monetary policy instruments you discussed.
Your finance officer has just advised you that the public transport system faces a deficit. Your board does not want you to cut service, which means that you cannot cut costs. Your only hope is to increase revenue? Would a fare increase boost revenue? You consult the economist on your staff who has researched studies on public transportation elasticities. She reports that the estimated price elasticity of demand for the first few months after a price change is about-0.3, but that after several years, it will be about -1.5. i. Explain why the estimated values for price elasticity of demand differ. ii. Compute what will happen to ridership and revenue over the next few months if you decide to raise fares by 5%. iii. Compute what will happen to ridership and revenue over the next few years if you decide to raise fares by 5%. iv. What happens to total revenue now and after several years if you choose to raise fares?
f(x)=(e7x+4x-1)(ln|5x+2x2-3)/ 1/2
Auctions can be an important tool for selling goods and gathering information. Auctions are used in multiple venues including agriculture, eBay, and distressed asset sales. The seller does not have to worry about estimating demand and setting a price because the demanders will do that through the auction process. Write an essay examining the value of auctions in the economy by addressing the following items.  Explain the difference between oral auctions and second-price auctions, including how they work and their results.  Use the expected value information to illustrate how having more bidders in an oral auction will likely result in a higher winning bid.  Explain how the number of bidders in a common value auction affects the outcome of the auction. Relate this to the effect on price in different market structures based on the number of producers.  Auctions lead to outcomes where buyers reveal their value for the products being auctioned. To successfully price discriminate, firms often rely on buyers revealing their value for products. Explain the conditions necessary for firms to be able to price discriminate.
Mr Makhani has just retired and received R1000 000 net lump sum income from his employer. He decided to spend it all on a tree farm, he planted pine trees for plumbing materials. Environmental Economists argue that planting trees produces market failure as the market fails to consider positive production spillover effects generated by CO2 capturing effect of tree plantations. With the aid of suitable diagrams, illustrate and discuss the positive external effect of Mr. Makhani’s business and indicate the necessary intervention by Government aimed at internalizing the effect of such spillovers.
Suppose Mika has budget of $600 for only two goods, x and y. The price of a Good X is $10 and the price of good Y is $25. Mika’s utility function for Good x and Good y is: UU(xx, yy) = 2xxxx. Suppose the price of a Good X increases to $15. a. What is Mika’s initial basket when the price of a Good X is $10? b. How much utility does this basket generate for Mika? c. What is Mika’s final consumption basket when the price of Good X increases to $15? d. Compute the values for the decomposition basket, B. e. Determine the numerical values of the substitution and income effects and graph your results. f. Is Good X normal or inferior goods for Mika? How do you know?