A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (P,) is constant and equal to $5.00. 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books: P¹ = $3.00, P₂² = $5.00, P3 = $7.50, P4 = $15.00 Properly label the lines. 2.) Use the line drawing tool to draw a price-consumption curve given the defined consumer optimums. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Magazines 50 45- 40- 35- 30- 25- 20- 15- 10+ 5- 0- 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Books

A consumer is choosing between magazines and books. His indifference curves are shown on the graph to the right. Consumer income allocated for these two goods is equal to $150. The price of magazines (P,) is constant and equal to $5.00. 1.) Use the line drawing tool to draw four separate budget constraints for the following prices for books: P¹ = $3.00, P₂² = $5.00, P3 = $7.50, P4 = $15.00 Properly label the lines. 2.) Use the line drawing tool to draw a price-consumption curve given the defined consumer optimums. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Magazines 50 45- 40- 35- 30- 25- 20- 15- 10+ 5- 0- 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Books

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 19SQ

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Imagine you have a movie streaming platform that offers new movies at the time of release. Your market research has revealed the following about your typical consumers’ satisfaction from watching movies: Number of movies (per month) Total Utility or Satisfaction 0 0 1 25 2 47 3 66 4 82 5 94 6 105 The maximum number of movies the consumer watches in a month is 6. (a) Construct a third column for this table to derive “Marginal Utility” corresponding to the number of movies watched. Explain in words what this concept means and why it is important to derive the marginal utilities in pricing.
8) A consumer has to choose the optimal amount of cheese and crackers to purchase. He or she has drawn his or her budget constraint (BC) and indifference curves on a graph with the amount of cheese (in ounces) on the horizontal axis and the amount of crackers (in packages) on the vertical axis. Which of the following statements is true if the price of cheese increases? The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a higher quantity of cheese. The BC shifts to the left (down). The BC rotates such that it intersects the vertical axis at the same point as before and intersects the horizontal axis at a lower quantity of cheese. The BC shifts to the right (up).
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Calculate marginal utility and marginal utilty per dollar for the data provided in the table below: (round to two decimal places) The Price of wine is 3 The Price of Cheese is 0.14 The Consumer's budget for wine and Cheese is 9.69 (CHEESE) (CHEESE) (CHEESE) WEDGES OF CHEESE GLASSES (WINE) (WINE) (WINE) MARGINAL UTILITY MARGINAL MARGINAL UTILITY MARGINAL UTIUTY/dollar OF WINE TOTAL UTILITY TOTAL UTILITY UTIUTY/dollar 70 Number Number Number Number 160 35 Number 65 Number 225 3. 41 Number Number Number Number 45 288 Number 61 Number 48 349 The Quantity of Wine this consumer would buy to maximize utlity is: Number Number The Quantity of Cheese this consumer would buy to maximize utilit is : What is the consumer's Total Utility when optimized: Number 10
a. What is your marginal rate of substitution of $1 bills for $5 bills? b. Produce an indifference curve graph for your preferences over these two goods. Make sure you label your graph very carefully and precisely.
From the hypothetical data in table 1, provide the following requirements. Table 1. Total Utility & Marginal Utility for Chocolate Bars Quantity (Chocolate Bars) Total Utility Marginal Utility 0 0 1 7 2 11 3 13 4 14 5 14 6 13 Solve the marginal utility column. Show the graphical solution. What does your graph implies?
On the diagram to the right is plotted a single bundle of 2 books and 3 DVDS consumed per month. This bundle is a point on the consumer's budget constraint. 10- 9- If the price of one book is $135.00 and one DVD is $90.00, then the consumer's 8- level of monthly income is $ 540 (round your answer to the neareast dollar). 7- Use the line drawing tool to draw the consumer's budget constraint. Label this line 'Budget. Carefully follow the instructions above, and only draw the required object. 3 1. 0- 10 Books (per month) O étv 15 MacBook Air DII 80 esc F6 F7 F2 F3 F1 ! @ $ へ & * 1 2 4 7 8 Q W R Y tab A F caps lock Z C V M shift fn control option command つつエ DVDS (per month) リ

Calculate marginal utility and marginal utility per dollar for the data provided in the table below: (round to two decimal places) The Price of wine is 3 The Price of Cheese is 0.14 The Consumer's budget for wine and Cheese is 9.69 (WINE) (WINE) (CHEESE) (CHEESE) (CHEESE) GLASSES (WINE) WEDGES OF WINE MARGINAL OF CHEESE TOTAL UTILITY MARGINAL UTILITY MARGINAL TOTAL UTILITY MARGINAL UTILITY UTILITY/dollar UTILITY/dollar 1 70 10 Number Number Number Number 35 160 6 Number 65 Number 225 3 41 Number Number Number Number 4 45 4. 288 Number 61 Number 48 349 The Quantity of Wine this consumer would buy to maximize utility is : Number Number The Quantity of Cheese this consumer would buy to maximize utility is : What is the consumer's Total Utility when optimized : Number
Suppose that a household has a weekly budget of $200 a week for its weekly shopping trip when it spends its weekly budget on toilet paper priced at $0.50 per roll and other goods. a. Draw a large diagram showing the household's weekly budget constraint for rolls of toilet paper and $ of other goods. Label the axes, the intercepts, the budget constraint and give the diagram a title. b. If the toilet paper and other goods are perfect complements and the household is observed to buy 24 rolls of toilet paper per week, draw an indifference curve that indicates this situation. Label the household's demands for toilet paper rolls and other goods and its indifference curve. C. Suppose a quota is introduced limiting purchases of toilet paper to 12 rolls per weekly shop. On the diagram from a. and b., draw the household's budget constraint and the highest indifference curve the household can reach. Label the household's budget constraint, demand for toilet paper rolls and other goods and the…
On the diagram to the right is plotted a single bundle of 2 books and 3 DVDs consumed per month. This bundle is a point on the consumer's budget constraint. If the price of one book is $135.00 and one DVD is $90.00, then the consumer's level of monthly income is $540 (round your answer to the neareast dollar). Use the line drawing tool to draw the consumer's budget constraint. Label this line 'Budget'. Carefully follow the instructions above, and only draw the required object.
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