Waldo's utility function is U(x,y) = xy. Waldo consumes 5 units of x and 25 units of y. (Show your work please) a. Waldo would be willing to make small exchanges of x for y in which he would give up 5 units of x for every unit of y he got. b. Waldo would be willing to trade away all of his x for y as long as he got more than 5 units of y for every unit of x he gave up. c. Waldo likes x and y equally well so he is always willing to exchange 1 unit of either good for more than 1 unit of the other. d. Waldo will always be willing to make trades at ay price if he does not have equal amounts of the two goods. e. None of the above.
Waldo's utility function is U(x,y) = xy. Waldo consumes 5 units of x and 25 units of y. (Show your work please) a. Waldo would be willing to make small exchanges of x for y in which he would give up 5 units of x for every unit of y he got. b. Waldo would be willing to trade away all of his x for y as long as he got more than 5 units of y for every unit of x he gave up. c. Waldo likes x and y equally well so he is always willing to exchange 1 unit of either good for more than 1 unit of the other. d. Waldo will always be willing to make trades at ay price if he does not have equal amounts of the two goods. e. None of the above.
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1.
Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should
A. All have the same marginal rate of substitution | ||||||||||||||||||||||||||
B. All buy more of the least expensive good | ||||||||||||||||||||||||||
C. All end up with the same bundle of goods | ||||||||||||||||||||||||||
D. All have the same level of satisfaction 2. Consider an indifference map with food on the vertical axis and shelter on the horizontal axis. If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:
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