5.(12) Max is stocking up on ice cream and cookies; ice cream costs $2 and cookies cost 50 cents ($.50). Themarginal utility gained from each treat is given in the table below. If Max is a rational utility maximizer andhas $8 to spend, how many of each treat will they purchase, and in what order? Show your work.Qice creamMU of iceQcookiesMU ofcreamcookies12345674019322926371845853663471

Given:Budget: $8Price of ice cream: $2Price of cookies: $0.50 To make a rational decision, first,…

Answered: 5. (12) Max is stocking up on ice cream…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2.5 Ms. Caffeine enjoys coffee (C) and tea (T) accord- ing to the function U(C,T) = 3C+4T. a. What does her utility function say about her MRS of coffee for tea? What do her indiffer- ence curves look like? b. If coffee and tea cost $3 each and Ms. Caffeine has $12 to spend on these products, how much coffee and tea should she buy to maximize her utility? c. Draw the graph of her indifference curve map and her budget constraint, and show that the utility-maximizing point occurs only on the T-axis where no coffee is bought. d. Would this person buy any coffee if she had more money to spend? e. How would her consumption change if the price of coffee fell to $2?
CS 11 Economics
4. Liam initially has a weekly allowance of €24 to spend on eggs (at €0.40 per egg) and beans (at €0.80 per tin). Liam will only consume 4 eggs with each tin of beans and never changes this proportion. (a) What is the utility maximising amount of eggs and beans that Liam buys each week? (b) Suppose the price of eggs rise to €0.60 per egg but the price of beans falls to €0.60 per tin. At the same time, Liam's weekly allowance rises to €30. How much of each good will Liam now buy? Compare your answer to that in (a) and explain the difference, if there is one. Use a diagram to complement your answer.
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Total Utility Total Utility 0 0 15 25 30 35 40 43 48 46 5 55 5 48 Refer to Table 6-3. The table shows Moira's total utility from each chocolate bar and cup of hot chocolate that she consumes. Which cup of hot chocolate has the highest marginal utility? the first the second the fourth the fifth Quantity 0 1 2 3 4 Quantity 0 1 3
1
26. Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys A) the combination that gives him equal total utility from pies and soda B) 2 pies and 2 cans of soda C) oniy sodas because they are iess expensive D) the combination that gives him the same marginai utility per doillar spent on pies as on soda
am. 113.
Pls answer quickly
The following table describes the utility that Greta gets from consuming Shiner Bock. Her marginal utility is maximized ___.
2. If peanut butter brings you 30 utils of pleasure for the last dollar's worth, and the last dollar you spend on jelly brings you 15 utils of pleasure, what do you do? How does this relate to the law of diminishing marginal utility?
5. The price of good x increases from 4 to 6. A consumer with an income of 120 buys 15 units of good x before the change and 10 units after. If the same consumer kept their utility constant and minimized expenditure, they would buy 8 units of x after the price change. What are the total effect, substitution effect, and income effect?

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