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SectionNotesW3 - U ( x; y ) = x + 3 y . The price of x is 1...

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ECON 100A: INTERMEDIATE MICROECONOMICS Section Notes-1 January 24, 2010 1. A consumer has a utility function U ( x 1 ; x 2 ) = x 2 1 x 2 . The price of good 1 is p 1 = 1 , and the price of good 2 is p 2 = 2 , and his income is 180 . (a) Draw the utility function (b) Draw the budget line. (c) Find MU 1 and MU 2 (d) What is MRS? (e) What is the optimal bundle that the consumer chooses? 2. A consumer has a utility function U ( x 1 ; x 2 ) = min f x 1 ; 3 x 2 g . The price of x 1 is 2 , and the price of x 2 is 1 , and her income is 140. (a) Draw the utility function (b) Draw the budget line. (c) Find the optimal bundle that the consumer chooses. 3. Linux has a utility function
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Unformatted text preview: U ( x; y ) = x + 3 y . The price of x is 1 , and the price of y is 2 , and his income is 8 . (a) Show an indi/erence curve passing through the point ( x; y ) = (3 ; 3) : (b) Given the prices and income, what bundle Linux chooses? (c) What bundle would Linux choose if the price of x is 1, the price of y is 4.and income is 8. 4. Consider a consumer with utility function U ( x 1 ; x 2 ) = ( x 1 +2)( x 2 +10) : (a) Find MU 1 and MU 2 ; and MRS (b) Find "tangency equation" (c) Find the solutions for demand functions x 1 and x 2 . 1...
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