For part b, is the utility received just the MU/P of 5 books and 1 pizza added up? **Transcription for Educational Website:**---2. The table below presents Kent’s marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each.| Books | MU/P | Pizzas | MU/P ||-------|-------|--------|-------|| 1 | 30 | 1 | 25 || 2 | 26 | 2 | 24.5 || 3 | 24.5 | 3 | 20 || 4 | 20 | 4 | 16 || 5 | 17.5 | 5 | 11 || 6 | 10 | 6 | 8 || 7 | 5.5 | | |**Questions:**a. How many books and pizzas will Kent purchase if he has $88 to spend?b. How much utility will Kent receive from his purchases in a?c. The price of books rises to $20 a book. How do your answers to a and b change?---**Explanation:**The table provides the marginal utility per dollar (MU/P) for books and pizzas. Marginal utility per dollar is a measure of the additional satisfaction or utility gained from spending one more dollar on the good. - Kent must consider the MU/P values to maximize his utility with a budget of $88.- As prices change, as in question c, the strategy to maximize utility would also change based on these MU/P values.**Note:** This scenario requires calculating the optimal combination of books and pizzas Kent will purchase within his budget constraints to maximize his utility.

Law of Equi -Marginal utility: It is the Law that states that ratio of the marginal utility to the…

2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 3 24.5 3 20 4 20 4 16 17.5 11 10 8 5.5 7 2 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? c. The price of books rises to $20 a book. How do your answers to a and b change?

2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 3 24.5 3 20 4 20 4 16 17.5 11 10 8 5.5 7 2 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? c. The price of books rises to $20 a book. How do your answers to a and b change?

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

A consumer who has spent all of her income on clothes and food and finds that her marginal-utility for clothes is 16 and marginal-utility for food is 20. If the price of clothes and food are both $4 . What should the consumer do for purchases to maximize total utility A. purchasing more clothes and less food B. purchasing more of both commodities C. purchasing less of both commodities D. purchasing more food and less clothes
Suppose you have a budget of $12 and cost of a cola is $2 and sandwich is $4. Using this information form the table, how many sandwiches and cola would you buy at the optimum?
marginal utility is a measure of the benefit (or value, or enjoyment) a person obtains by a) Consuming a single additional unit of a product. b)Selling a single additional unit of a product (and spending the resulting cash). c) Borrowing the dollar value of a single additional unit of a product (and spending it on something nice). d)Converting a single additional unit of product to an equivalent number of units.
A consumer's budget is 137. A unit of good x costs 3 and a unit of good y costs 4. If the consumer purchases 3 units of good y, how many units of good x can the consumer purchase? Please round your answer to two decimal places. Answer: Previous page 2028 P Type here to search 01/12/2021
can you show how they got this answer
How does household made choices based on budget or their utility satisfaction? Justfiy
A family with a monthly income of $2200 spends $850 for rent $225 for utilities and $325 for food. What percent of the family income is spent for cach?
ADDED DISCUSSION WITH QUESTIONS TOPIC: MARGINAL UTILITY 5 6 7 No. of Pieces Total Utility (Q) 1 2 3 4 (TU) 150 225 250 220 8 9 10 11 Marginal Utility is calculated using the formula given below 12 Marginal Utility (TU-TU)/(Q-Q) 13 14 D For 1 Piece For 2 Piece For 3d Piece (86-0)/(A6-0) -(87-86)/(A7-A6) 150 75 (88-87)/(AS-A7) 25 Marginal 15 Utility Formula 16 Marginal Utility 17 For 1st Piece of the Cake Marginal Utility1 = (150-0)/(1-0) Marginal Utility1 = 150 For 4th Piece (89-88)/(AS-AS) -30 For 2nd Piece of the Cake Marginal Utility2=(225-150)/(2-1) Marginal Utility2 = 75 For 3rd Piece of the Cake Marginal Utility3 = (250-225)/(3-2) Marginal Utility3 = 25 For 4th Piece of the Cake Marginal Utility4 = (220-250) / (4-3) Marginal Utility4 = -30 Therefore, here we can see how the marginal utility of a piece of cake declines after the consumption of the previous one. Here, the highest utility is reached at the consumption of the 3rd piece, beyond whichthe total declined. This is a…
Statistical answer needed
Number of Sodas per day Total Utility Marginal Utilit 1 20 35 3 47 12 4 10 Refer to the table, The marginal utility of the second soda per day is L. (Answer should be in the form of numerical characters, e.g. 20) Enter your answer here
EXERCISE 7 Aisha is considering how to allocate the next 6 hours of her free time. She could choose between leisure (L) and helping her neighbour with the house chores. If she decides to help her neighbour, she is going to get paid at £25 per hour, which she can then spend on her favourite pizza (P). Suppose the price of pizza is £12.50. Aisha's preferences for leisure and pizza are given by the following utility function: U(L, P) = 3L + P. (MU₁ = 3, MUp = 1). a) Write down Aisha's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. b) Calculate Aisha's marginal rate of substitution between leisure and pizza. Explain the concept of MRS and interpret the figure obtained. c) Find Aisha's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. d) Would Aisha's optimal choice change if she could get a discount on her pizza purchases so…