plz can you solve the 4th question and 3 rd question at part b thnks a lot new b
ID: 1129106 • Letter: P
Question
plz can you solve the 4th question and 3 rd question at part b thnks a lot
new budget con additional money and can now spend 800TL per month. Draw her c. As a result of the increase in income, Zeynep decides to eat eight times at Big Chefs and spendt nights at Nefes Pub. What kind of a good is a dinner at Big Chefs? What kind o at Nefes Pub? fect, and which d. What part of the increase in number of dinners at Big Chefs is due to the income ef part is due to the substitution effect? Explain your anselh 4. Suppose that Mrs. Diyar allocates all her income on food and shelter. The price of food i price of shelter is 4 TL per unit. Suppose further that the following equations represent the marginal utilities of food and shelter, respectively MUs-80-8S where F and S represent the quantity of food and shelter consumed, respectively and MUF measured in million utils. If Mrs. Diyar's income is 48 TL, how many units of each good should she purchase to maximize her total satisfaction? Mu Part B. Short questions I. The table below shows how the total utility that Zach derives from eating candy bars changes as he consumes more and more candy bars each da Candy Bars Total Utility Marginal Utili 20 30 38 48 50 LC Fill in the table above. Do the numbers in the table support the law of diminishing marginal utility? Explain. 2. Say whether you agree or disagree the following statement and explain your reason: In product markets, when price of a good falls, the substitution effecet leads to more consumption, but for 3. Alp is choosing how to allocate his spending between CD's and clothes. The figure below shows his budget line and an indifference curve. Match each lettered point on the diagram with the appropriate numbered phrase below: 1. The point at which Alp maximizes utility 2. The point at which Alp buys only CD's and no clothes. 3. A consumption bundle which would not use up Alp's whole budget for these goods. 4. A point yielding the same satisfaction as at d but which Alp cannot afford. 5. A consumption bundle preferred to point d but which Alp Clothes c cD can't afford.Explanation / Answer
Question 4
Let quantity purchased of Food to maximize total satisfaction be F units
Let quantity purchased of Shelter to maximize total satisfaction be S units
Total income = 48TL
Price of Food = 2TL
Price of Shelter = 4TL
Budget equation is as follows -
2F + 4S = 48
MUF = 24 - 2F
MUS = 80 - 8S
Utility maximizing equation is as follows -
MUF/MUS = PF/PS
(24 - 2F)/(80 - 8S) = 2/4
(24 - 2F)/(80 - 8S) = 1/2
2(24 - 2F) = 80 - 8S
48 - 4F = 80 - 8S
4F = 8S - 32
F = 2S - 8
Budget equation is as follows -
2F + 4S = 48
2(2S - 8) + 4S = 48
4S - 16 + 4S = 48
8S = 64
S = 8
F = 2S - 8 = (2*8) - 8 = 8
So,
In order to maximize her total satisfaction, she will purchase 8 units of Food and 8 units of Shelter.
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