UCLA Mathematics Economic Problem Set
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< moodle2.sscnet.ucla.edu/pluginfile.php/949165/mod_resource/content/0/PS5.pdf TUCI + TULI WS TULI ZUCH XX TEL: https://... A + MO Problem 1 = Mary has the following utility function: u(x, y) 3 ln(x) + 2y. Her income is given by I = 10 and the prices originally are px Py = 2 1 and py = = (a) What are Mary's marshallian demands? (b) How much of each good is Mary currently consuming? (c) What is the utility level that Mary can achieve? (d) Assume the price of x increases to Px = 3, find Mary's new levels of consumption. = ? (e) Find the total, substitution and income effects for good x caused by the price change. Consider this price change a large price change (Apz = px - Px = 3 1 = 2). · = = = Problem 2 Joan has the following utility function: u(x, y) = 5x + 3y. = (a) Find Jane's marshallian demands. (b) Find Jane's hicksian demands. < moodle2.sscnet.ucla.edu/pluginfile.php/949165/mod_resource/content/0/PS5.pdf TUCI XI + TULI WARIS TULI TUCH TEL: https://... A + MO Consider that income is I = $8, and prices are given as px = $4, Py = $2. - = = (c) Does Jane have enough money to attain a utility level of 20? Justify your answer. (d) Assume the price of y marginally increases. Find the total, income and substitution effect for x due to the change in Py: 1 (e) Assume the price of y increases to 4. Find the total, income and substitution effects for x. Consider this price change a large price change. (f) Compare the answers of the last two questions. Purchase answer to see full attachment Explanation & Answer: Math Problems Set Tags: algebra mathematics calculus User generated content is uploaded by users for the purposes of learning and should be used following FENTYESSAYS.COM ESSAY's honor code & terms of service.
