*Calculate the marginal utility per dollar of going from eight to nine DVDs.* To increase total utility without increasing spending, should Skeeter change the amount of consumption of either good?No, Skeeter is already consuming at the optimal consumption bundle.Yes, Skeeter should choose more smoothies and fewer DVDs.Yes, Skeeter should choose fewer smoothies and more DVDs.Yes, Skeeter should choose more smoothies and more DVDs.* What is the total utility at the optimal consumption bundle? Suppose that Skeeter consumes smoothies and DVDs.The price of smoothies is $5 per unit and the price ofDVDs is $10 per unit. The table shows Skeeter's utilityfrom the consumption of each good; each row representsa possible consumption bundle. Currently, Skeeter isconsuming 18 smoothies and 9 DVDs.Quantity ofsmoothies101214161820222426Utility ofsmoothies (utils)50.0068.3081.0089.0093.7096.4097.7498.2098.56Q ofDVDs1312111098765Utility ofDVDs (utils)230.00213.00198.00185.00174.00165.00158.00153.00150.00

Marginal utility is the additional pleasure a consumer receives from having one more unit of a good or service. To predict how much of a good buyers will buy, economists use the concept of marginal utility. Marginal utility is the additional satisfaction a customer receives by purchasing one more unit of a good or service. The pleasure a person experiences from consuming one more unit of an item or service is known as marginal utility. According to the marginal utility hypothesis, consuming an additional unit of a good increases consumer happiness.a) From 8 to 9 DVds the marginal utility per dollar : = 174-165)/10= 0.9 utils/$ Thus the marginal utility will be 0.9 b) Currently Skeeter is consuming 18 smoothies and 9 dvds and his current utility level is 267.70; He can improve his utility by going from 18 smoothies to 12 smoothies and 9 dvds. to 12 pizzas. 3rd option is correct. Skeeter should choose fewer smoothies and more dvds.c) Optimal consumption bundle is at maximum utility: 12 tulips and 12 pizzas. the utility is: 281.30 utils.

Answered: Calculate the marginal utility per…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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*Calculate the marginal utility per dollar of going from eight to nine DVDs.

* To increase total utility without increasing spending, should Skeeter change the amount of consumption of either good?

No, Skeeter is already consuming at the optimal consumption bundle.

Yes, Skeeter should choose more smoothies and fewer DVDs.

Yes, Skeeter should choose fewer smoothies and more DVDs.

Yes, Skeeter should choose more smoothies and more DVDs.

* What is the total utility at the optimal consumption bundle?

Suppose that Skeeter consumes smoothies and DVDs.
The price of smoothies is $5 per unit and the price of
DVDs is $10 per unit. The table shows Skeeter's utility
from the consumption of each good; each row represents
a possible consumption bundle. Currently, Skeeter is
consuming 18 smoothies and 9 DVDs.
Quantity of
smoothies
10
12
14
16
18
20
22
24
26
Utility of
smoothies (utils)
50.00
68.30
81.00
89.00
93.70
96.40
97.74
98.20
98.56
Q of
DVDs
13
12
11
10
9
8
7
6
5
Utility of
DVDs (utils)
230.00
213.00
198.00
185.00
174.00
165.00
158.00
153.00
150.00

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