Suppose that MUx-50 and MUy - 40 for Joy. The prices of good X and good Y are $5 and $4, respectively. If Joy is maximizing her utility, how many units of good X does the consumer buy if she has $45 of income? O 20 85 00 O 15 O 10
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- If people do not have a complete mental picture of total utility for every level of consumption, how can they find their utility-maximizing consumption choice?Would you expect marginal utility to rise or fall with additional consumption of a good? Why?Who determines how much utility an individual will receive from consuming a good?
- Would you expect total utility to rise or fall with additional consumption of a good? Why?Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utility—maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.0 2 O 4 6 08 D Scones 10 1 2 3 4 5 Total Utility 10 18 24 Refer to Table 6.3, which shows the total utility and marginal utility derived from the consumption of scones. The first column of the table represents the number of scones a consumer consumes in a day. The second column of the table presents the total utility derived from that consumption, and the third column shows the marginal utility of each additional scone. The total utility derived from the consumption of one scone is units. 28 30 Marginal Utility 6 2
- Question 21 Units of Product Marginal Utility, A (Price = $1) Marginal Utility, B (Price = $1) First Second Third Fourth Fifth Sixth Seventh 16 utils. O 54 utils. Ⓒ70 utils. 12 Ⓒ20 utils. 10 8 6 4 2 0 16 14 12 10 8 4 Refer to the data for a consumer whose income = $4. In equilibrium, the introduction of new product C has increased this consumer's total utility by Marginal Utility, New Product, C (Price = $1) 20 18 16 14 12 10 8Question 3 The table shows the total utility data for products X and Y. Assume that the prices of X and Y are $3 and $4, respectively, and that consumer income is $18. Units of X Total Utility 9. Units of Y Total Utility 16 2 15 28 3 19 3. 36 4 21 4. 40 5 22 42 How many units of the two products will the consumer buy to get maximum utility? O 2 of X and 3 of Y O 2 of X and 2 of Y O 3 of X and 4 of Y O 1 of X and 4 of Y A Moving to another question will save this response.Table 6.1 Pretzels Marginal Utility 1 30 20 3 5 4 Refer to Table 6.1, which shows the marginal utility of each additional unit of pretzel for a consumer. The first column of the table shows the number of pretzels consumed in a day, and the second column of the table shows the marginal utility of each additional unit of pretzel. The total utility derived from the consumption of three pretzels is units. O a. 5 O b. 55 Oc. 15 Od. 57 O e. 70
- Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4, respectively, and that the consumer's income is $25 Units of L 1 2 3 4 5 Multiple Choice O Total Utility Units of M 9 O What level of total utility does the rational consumer realize in equilibrium? 51 utils 86 utils 162 utils 15 18 20 21 58 utils 1 2 3 4 5 Total Utility 16 28 36 40 42TABLE 6-1 Quantity (burgers) Total Utility Marginal Utility 0. 1 20 20 44 24 X 22 4. 84 y Refer to Table 6-1. The table shows Antonio's total and marginal utility from eating burgers. What is the marginal utility that Antonio gets from eating the 4th burger (y)? O 22 18 16 2032. Suppose that Mariam drinks coffee and tea and is in consumer equilibrum. marginal utility of the last cup of coffee that she drank was 8, while the marginal utility of the last cup of tea she had was 7. If the price of the tea is RO 0.70 per cup, what is the price of a cup of coffee? a RO 1.14 O RO 0.80 c. RO 0.88 d. RO 0.61 Mu : 8 nP coff Mu 0-70 Mu : 7