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Carleton Econ 2030 – Intermediate Microeconomics Ii

Submitted by • October 2, 2018

ECON 2030: EIntermediate Microeconomics II: ConsumersProblem Set # 2Till GrossDepartment of Economics, Carleton UniversityFall 2016Due Date: October 5th 2016In this problem set, as in all following ones and the exams, all unit increases referto an infinitesimally small increment. In other words, use derivatives to determinemarginal utility etc.1Expenditure Minimization (10 points)Sally the Sleek’s preferences can be described by the utility function U (x, y) = x2 y 3 /512. Pricesare px = 2 and py = 6, she has an income of $80 to spend.(a) If Sally initially consumed 4 units of x and 12 units of y, how much could she save if sheconsumed 2 small more units of x and kept utility constant?1 (4)¯ = 8. What is the minimum she has(b) Sally decides that she does not need a higher level than Uto spend in order to attain that utility? (4)(c) What is the cost of one additional (small) unit of extra utility in that case?2 (2)2Deriving Demand Curves (10 points)Ariadne’s preferences can be described

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