1. A consumer has an income of $3024 to spend each day. The only two goods the consumer is interested in purchasing are goods A and B. The marginal-utility schedules for these two goods are shown in the table below. The price of B does not change and is $378. The marginal utility per dollar from B is also shown in the table. But the price of A varies as shown in the table. The marginal utility per dollar from A when the price of A is $1512 and $756 is shown in the following table. Good A Good B Quantity MU MU/$1512 MU/$756 MU MU/$378 1 2 3 4 5 6 48 32 24 16 8 4 |||| 24 15 12 8 6 4 ||||

1. A consumer has an income of $3024 to spend each day. The only two goods the consumer is interested in purchasing are goods A and B. The marginal-utility schedules for these two goods are shown in the table below. The price of B does not change and is $378. The marginal utility per dollar from B is also shown in the table. But the price of A varies as shown in the table. The marginal utility per dollar from A when the price of A is $1512 and $756 is shown in the following table. Good A Good B Quantity MU MU/$1512 MU/$756 MU MU/$378 1 2 3 4 5 6 48 32 24 16 8 4 |||| 24 15 12 8 6 4 ||||

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Mike is a jellyfish wrangler. In June and July he spent his budget on fish tanks and wet suits. Each fish tank cost $50 and each wet suit cost $100. At Mike's optimal choice, his marginal utility from the last fish tank purchased is 200. This means that his marginal utility from the last wet suit purchased is:
b) Diana has $6.00 to spend. She has the option to buy two goods: sandwiches and peppermints. Sandwiches cost $3.00 each, and peppermints cost $1.00 per pack. The table below shows the utility Diana derives from consuming sandwiches or peppermints at various levels of consumption. In the table below, compute and complete the table below for the marginal utility per dollar for each level of consumption. i. Peppermints Marginal Utility/ $ (price per each) Sandwiches Marginal Utility Marginal utility/ $ (price per each) Marginal Utility Units purchased 1 9 15 9 3 4 4 n/a n/a 1 ii. Briefly explain how Diana should spend the first $3.00.
7. MRS and utility maximization Suppose your classmate Felix loves to eat dessert-so much so that he allocates his entire weekly budget to apple crisp and pie. The price of one bowl of apple crisp is $1.75, and the price of a piece of coconut crème pie is $7.00. At his current level of consumption, Felix's marginal rate of substitution (MRS) of apple crisp for pie is 5. In other words, Felix is willing to sacrifice five bowls of apple crisp for one piece of pie per week. Does Felix's current consumption bundle maximize his utility? That is, does it make him as well off as possible? If not, how should he change it to maximize his utility? Felix could increase his utility by buying more apple crisp and less pie per week. Felix could increase his utility by buying less apple crisp and more pie per week. Felix's current bundle maximizes his utility, and he should keep it unchanged.
Gabriella obtains utility from consuming granola bars and cappuccino. The following table shows the total utility (TU) she obtains from consuming different amounts of the two goods. The price of a granola bar is $3 and the price of a cup of cappuccino is $2. She has allocated $9 to spend on granola bars and cappuccino. 1. Complete the table by calculating the marginal utility (MU) and the MU per dollar spent on each granola bar and cup of cappuccino. 2. What is Gabriella’s optimal consumption bundle of granola bars and cups of cappuccino?
There are only two brands of tennis balls Tom purchases: "Wilson" and "Penn." The more he purchases of a ball, the lower the marginal utility of that ball. He spends all of his income and his marginal utility of a "Wilson" is 6 and his marginal utility of an "Penn" is 12. The price of a "Wilson" ball is $1 and the price of an "Penn" is $2. Which of the statements is true based on the above information? Question 19 options: Tom could increase his satisfaction by a) trading "Wilson" for "Penn." In equilibrium, Tom must give up b) three "Penn" balls for two "Wilson" balls. Tom can increase his satisfaction by c) doing nothing Tom would be willing to give up two d) "Penn" balls for one "Wilson" ball.
The following table reflects the utility one receives from consuming a given product. Units Consumed Total Utility (TU) Marginal Utility (MU) 0 0 ------- 1 60 60 2 ____ 50 3 150 ____ 4 175 ____ 5 ____ 20 6 210 ____ Complete the table solving for the missing total utility or marginal utility values in each row. Total utility increases throughout the table. What rate does total utility increase? In other words, is it rising at an increasing rate, a…
Lisa consumes only two goods, pizzas and burritos. In equilibrium, her marginal utility per slice of pizza is 10 and her marginal utility per burrito is 8. Instructions: Enter your answer rounded to two decimal places. If a slice of pizza costs $3, then the price of a burrito must be $
Suppose you had a budget of $20.00 and the prices of a burger and a slice of pizza are $4.00 and $2.00 respectively. What is the marginal utility per dollar spent for the fourth burger?
Please answer carefully and explain in as much detail as possible.
Suppose the marginal utility of a Coke is 15 utils, and its price is $1.50. The marginal utility of a pizza is 20 utils, and its price is $5. To achieve consumer equilibrium, you need to spend
Larry and Teri allocate their consumption between two goods: hats and bats. The price of hats is €5 each, and the price of bats is €10 each. For Larry, the marginal utility of the last hat consumed was 8, and the marginal utility of the last bat was 24. For Teri, the marginal utility of the last hat was 6, and the marginal utility of the last bat was 12. Which consumer is not maximizing his/her utility? How can you tell? How should he/she change their allocation?