question # 1 KEYbehavioral economics, 467bounded rationality, 467MSequilibrium, 467consumerdiminishing marginal utility, 456disutility, 457equimarginal principle, 463marginal utility, 457neuroeconomics, 471EXERCISES1. Using the following information, calculate total utilityand marginal utility.a. Plot the total utility curve.b. Plot marginal utility directly below total utility.c. At what marginal utility value does total utility reacha maximum?Number of utils for the first unitNumber of utils for the second unitNumber of utils for the third unitNumber of utils for the fourth unitNumber of utils for the fifth unitNumber of utils for the sixth unitNumber of utils for the seventh unitNumber of utils for the eighth unitNumber of utils for the ninth unit30025022016010050200-2502. Is it possible for marginal utility to be negative and totalutility positive? Explain.3. Suppose Mary is in consumer equilibrium. Themarginal utility of good A is 30, and the price of goodA is $2.a. If the price of good B is $4, the price of good C is $3,the price of good D is $1, and the price of all othergoods and services is $5, what is the marginal utilityof each of the goods Mary is purchasing?b. If Mary has chosen to keep $10 in savings, what isthe ratio of MU to P for savings?4. Using the following utility schedule, derive a demandcurve for pizza.a. Assume income is $10, the price of each slice ofpizza is $1, and the price of each glass of beer is $2.Then change the price of pizza$2 per slice.b. Now change income to $12 and derive a demandcurve for pizza.Slices ofPizzatotal utility, 457utility, 45612345TotalUtility200380540600630Glasses ofBeer12345TotalUtility5008009009209305. Using utility, explain the following commonly madestatements:a.I couldn't eat another bite.b. I'll never get tired of your cooking.c. The last drop tastes as good as the first.d. I wouldn't eat broccoli if you paid me.e. My kid would eat nothing but junk food if I allowed her.f. Any job worth doing is worth doing well.6. How would guests' behavior be likely to differ at aBYOB (bring your own bottle) party from one at whichthe host provides the drinks? Explain your answer.7. A round of golf on a municipal golf course usually takesabout five hours. At a private country club golf course,a round takes less than four hours. What accounts forthe difference? Would the time spent playing golf bedifferent if golfers paid only an admission fee

The utility is the wants satisfying power of a product. Total utility is the total amount of…

1. Using the following information, calculate total utility and marginal utility. a. Plot the total utility curve. b. Plot marginal utility directly below total utility. c. At what marginal utility value does total utility reach a maximum?

1. Using the following information, calculate total utility and marginal utility. a. Plot the total utility curve. b. Plot marginal utility directly below total utility. c. At what marginal utility value does total utility reach a maximum?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter21: Demand: Consumer Choic

Section: Chapter Questions

Problem 1E

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