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Question 3 The consumer's utility function is the following: $U = x_1 + 10x_2^{0.6}$ The consumer's optimal values of $x_1$ and $x_2$ are given by the following: $x_1 = \frac{I}{P_1} = \frac{P_2}{P_1} \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$, $x_2 = \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$ The compensated demand equations for $x_1$ and $x_2$ are the following: $x_1 = \frac{U-10}{P_1} \left(\frac{6P_1}{P_2}\right)^{\frac{0.6}{1-0.6}}$, $x_2 = \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$ Assume the prices are the following: $P_1 = 1$, $P_2 = 1$, $I = 10000$, and the $P_1$ that makes $x_1 = 0$ is $P_1 = 16732$. What is the income that would make the consumer equally happy when $x_1 = 0$ (This is $I_s$ in the lecture notes)? Selected Answer: 10078.55 Correct Answer: 100981.7 Answer range +/- 1 (100980.7 - 100982.7) Question 4 Figure 21-18 0 out of 4 4 out of 4 points

          Question 3
The consumer's utility function is the following: $U = x_1 + 10x_2^{0.6}$
The consumer's optimal values of $x_1$ and $x_2$ are given by the following: $x_1 = \frac{I}{P_1} = \frac{P_2}{P_1} \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$, $x_2 = \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$
The compensated demand equations for $x_1$ and $x_2$ are the following: $x_1 = \frac{U-10}{P_1} \left(\frac{6P_1}{P_2}\right)^{\frac{0.6}{1-0.6}}$, $x_2 = \left(\frac{6P_1}{P_2}\right)^{\frac{1}{1-0.6}}$
Assume the prices are the following: $P_1 = 1$, $P_2 = 1$, $I = 10000$, and the $P_1$ that makes $x_1 = 0$ is $P_1 = 16732$.
What is the income that would make the consumer equally happy when $x_1 = 0$ (This is $I_s$ in the lecture notes)?
Selected Answer: 10078.55
Correct Answer: 100981.7
Answer range +/- 1 (100980.7 - 100982.7)
Question 4
Figure 21-18
0 out of 4
4 out of 4 points

Question 3
The consumer's utility function is the following: U = x1 + 10x2^0.6
The consumer's optimal values of x1 and x2 are given by the following: x1 = (I)/(P1) = (P2)/(P1)((6P1)/(P2))^(1)/(1-0.6), x2 = ((6P1)/(P2))^(1)/(1-0.6)
The compensated demand equations for x1 and x2 are the following: x1 = (U-10)/(P1)((6P1)/(P2))^(0.6)/(1-0.6), x2 = ((6P1)/(P2))^(1)/(1-0.6)
Assume the prices are the following: P1 = 1, P2 = 1, I = 10000, and the P1 that makes x1 = 0 is P1 = 16732.
What is the income that would make the consumer equally happy when x1 = 0 (This is Is in the lecture notes)?
Selected Answer: 10078.55
Correct Answer: 100981.7
Answer range +/- 1 (100980.7 - 100982.7)
Question 4
Figure 21-18
0 out of 4
4 out of 4 points

Added by Julian S.

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