1. Utility Maximization: The following table illustrates Eileen's utilities from watching first-run movies in a theater and from renting movies online. Suppose that she has a monthly movie budget of $36, each movie ticket costs $6, and each video rental costs $3. Movies in a Theater Online Movies Total Total Quantity MU MU/p Quantity MU MU/p Utility Utility - - 1 200 1 250 2 290 2 295 3 370 3 335 4 440 4 370 5 500 5 400 550 420 7 590 7 430 a. Complete the table above. (35 points) b. How much of each good does Eileen consume? (15 points) c. Suppose the price of each movie ticket rises to $8 but the price of each video rental drops to $2. How much of each good does Eileen consume? (25 points)

1. Utility Maximization: The following table illustrates Eileen's utilities from watching first-run movies in a theater and from renting movies online. Suppose that she has a monthly movie budget of $36, each movie ticket costs $6, and each video rental costs $3. Movies in a Theater Online Movies Total Total Quantity MU MU/p Quantity MU MU/p Utility Utility - - 1 200 1 250 2 290 2 295 3 370 3 335 4 440 4 370 5 500 5 400 550 420 7 590 7 430 a. Complete the table above. (35 points) b. How much of each good does Eileen consume? (15 points) c. Suppose the price of each movie ticket rises to $8 but the price of each video rental drops to $2. How much of each good does Eileen consume? (25 points)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the following table shows your demand schedule for CDs. Price Quantity Demanded $15 1 12 9. 9:56 6. 4 (a) What is your total utility from four CDs? Total utility: $ (b) What is your marginal utility from the fourth CD? Marginal utility: $ (c) If the price is $6, how much will your consumer surplus be? Consumer surplus: $
Indicate whether the statement is True or False, and briefly explain why: A. Marginal benefit equal to marginal cost is the point where consumers are maximizing their satisfaction within their budget. B. The marginal benefit is equal to the marginal utility you obtain from consuming one extra unit of the good. C. What matters for consumers when they want to decide to buy one more unit of a good is how much utility they got from all the units they consumed before. D. Elasticity can be related to the measure of a percentage change in quantity demanded divided by the percentage change in the price of a good.
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Q2) This table shows the quantities consumed of one commodity and the total utility gained from this commodity. Marginal Utility Total Utility Quantity 9 1 18 2 25 3 30 4 34 5 36 6 36 7 34 8 The Required: 1. Extract the marginal utility 2. Draw the total and marginal utility curve in the graph and explain the importance of marginal utility.
4
. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases. Quantity Price per Download MU per download Music downloads 3 $3 60 Video downloads 2 $3 45 As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. Her available budget was $19.00. Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Total Money Total Budget music mu mu/$ music videos mu mu/$ videos Spent Remaining 1st ? ?…
Question 3
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