Microeconomics
Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 1, Problem 3DQ
To determine

Utility and its relation to human behavior.

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Caci, un he would spend a dollar buying a first cup of coffee? LO7.2 4. Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106. LO7.2 a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. nuts, coffee, or both. How big would that buuget nave LU DC DCIUIU
Answer the question on the basis of the following two schedules, which show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities MUS 56 48 32 24 20 16 Units of J 1 2 3 4 5 6 7 Multiple Choice O O What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $36 and the prices of J and K are $4 and $4, respectively? O 12 238 utis 40 utils 204 Units of K 1 2 3 4 5 6 7 MUK 32 28 24 20 12 10. 8
Q.3 (a) No of Units Consumed 1 2 4 6. Total Utility in Units/Utils 10 25 40 60 75 80 Marginal Utility in Units/Utils 15 20 15 (i) State and explain the law illustrated in the above table. (ii) Outline two assumptions underlying this law. lo 3.
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