1. Utility and Consumer Surplus A. Use the figure below to fill in the total utility and marginal utility of medical care in the table. In this example, is the marginal utility of health care increasing or decreasing? What are some reasons why this might be the case (briefly explain; approximate 3 sentences)? Health (H) 16 Utility 15 13 10 Medical care (g) 1 2 4 Units of Medical Care Total Utility Marginal Utility 1 2 3 Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own demand for going to the dentist to get a check-up?
1. Utility and Consumer Surplus A. Use the figure below to fill in the total utility and marginal utility of medical care in the table. In this example, is the marginal utility of health care increasing or decreasing? What are some reasons why this might be the case (briefly explain; approximate 3 sentences)? Health (H) 16 Utility 15 13 10 Medical care (g) 1 2 4 Units of Medical Care Total Utility Marginal Utility 1 2 3 Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own demand for going to the dentist to get a check-up?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
part A
Transcribed Image Text:1. Utility and Consumer Surplus
A. Use the figure below to fill in the total utility and marginal utility of medical
care in the table. In this example, is the marginal utility of health care
increasing or decreasing? What are some reasons why this might be the
case (briefly explain; approximate 3 sentences)?
Health (H)
Utility
16
15
13
10
3
4 Medical care (q)
1
2
Units of Medical Care
0
1
Total Utility
Marginal Utility
2
3
4
Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own
demand for going to the dentist to get a check-up?
Transcribed Image Text:B. The figure below shows the market of physician visit. Current market price for
each physician visit is $5.
Price ($)
9
8
PMKT = $5
Number of Physician
Visits (Q)
0 1 2 3 4
1) According to the figure, what is the optimal number of physician visits which
can maximize consumer surplus?
2) Calculate total consumer surplus when the number of physician visits
reaches the optimal amount.
3) When market price rises from $5 to $6, how will the optimal number of
physician visits and consumer surplus change?
765
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