# Answer to Question #64555 in Microeconomics for nader

Question #64555

3. Nagehan derives a utility from consuming Caviar (C) and Champagne (W). Her utility function is given as

U= U(C,W) = 5C2/3W1/3

The price of a tin of caviar (Pc) is 50 YTL, while the price of a bottle of champagne (Pw) is 8 YTL.

a. Determine the quantities of caviar and champagne Nagehan must purchase in order to receive a utility level of 200.

b. Determine the minimum expenditure Nagehan must make in order to achieve a level of utility equal to 200.

c. Compute the value of µ* for this problem and interpret its value as it specifically applies to Nagehan.

d. Determine how changes in income (M) will affect Nagehan’s demand for caviar.

e. Determine how changes in price of a tin of caviar (Pc) will affect Nagehan’s demand for caviar and graphically derive the demand curve for caviar.

U= U(C,W) = 5C2/3W1/3

The price of a tin of caviar (Pc) is 50 YTL, while the price of a bottle of champagne (Pw) is 8 YTL.

a. Determine the quantities of caviar and champagne Nagehan must purchase in order to receive a utility level of 200.

b. Determine the minimum expenditure Nagehan must make in order to achieve a level of utility equal to 200.

c. Compute the value of µ* for this problem and interpret its value as it specifically applies to Nagehan.

d. Determine how changes in income (M) will affect Nagehan’s demand for caviar.

e. Determine how changes in price of a tin of caviar (Pc) will affect Nagehan’s demand for caviar and graphically derive the demand curve for caviar.

Expert's answer

Dear nader , your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed:

**Submit order**Need a fast expert's response?

Submit orderand get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

## Comments

## Leave a comment