5. Marie has a weekly budget of $42, which she likes to spend on magazines and pies. a. If the price of a magazine is $7 each, what is the maximum number of magazines she could buy in a week? maximum of magazine = 6 magazines a week b. If the price of a pie is $21, what is the maximum number of pies she could buy in a week? maximum of pies = 2 Pies a week c. What is Marie's opportunity cost of purchasing a pie (in terms of magazines)? d. At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? e. Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.
5. Marie has a weekly budget of $42, which she likes to spend on magazines and pies. a. If the price of a magazine is $7 each, what is the maximum number of magazines she could buy in a week? maximum of magazine = 6 magazines a week b. If the price of a pie is $21, what is the maximum number of pies she could buy in a week? maximum of pies = 2 Pies a week c. What is Marie's opportunity cost of purchasing a pie (in terms of magazines)? d. At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? e. Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 12PA
Related questions
Question
Transcribed Image Text:5. Marie has a weekly budget of $42, which she likes to spend on magazines and pies.
a. If the price of a magazine is $7 each, what is the maximum number of magazines she
could buy in a week?
maximum of magazine = 6 magazines a week
b. If the price of a pie is $21, what is the maximum number of pies she could buy in a
week?
maximum of pies = 2 Pies a week
c. What is Marie's opportunity cost of purchasing a pie (in terms of magazines)?
d. At the start of the week, Marie decides to buy a pie. Does this imply that the utility
she receives from this pie is greater than or less than her opportunity cost of
purchasing the pie?
e. Marie is thinking about purchasing a second pie. Do we expect the marginal utility
she receives from the second pie to be greater than, less than, or equal to the
marginal utility she receives from the first pie? Explain your answer.
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