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Jan 9, 2024

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3. Colin consumes both corned beef sandwiches and steak sandwiches. Corned beef is priced at $5.00 per sandwich and steak sandwiches are priced at $8.00. Which of the following marginal utility pairs is consistent with Colin's consumer equilibrium at these prices? (Hint: Use your knowledge about consumer equilibrium condition.) MU of corned beef sandwich = 1; MU of steak sandwich = 1.6 4. People usually consume more goods even when their Marginal utility is negative. False 5. The amount of additional satisfaction derived from an additional unit of a good or service is called: marginal utility. 6. Consumer theory shows that if we know the price of an item, the income of an individual and their preferences, we can predict the combination of goods and services that will maximize that person's utility. True 7. The total utility from consuming five donuts is 9, 19, 30, 38, and 45 utils, respectively. Marginal utility begins to diminish after consuming the ____ donut. third 8. The Law of Diminishing Marginal Utility states that as you consume more units of a good, your marginal utility decreases. 9. If the marginal utility per dollar spent on Good X is greater than that of Good Y, the utility-maximizing consumer should: Correct buy more of Good X and less of Good Y. 10. Law of diminishing marginal utility helps explain: Correct why most individual demand curves slope downward.
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