e) Do any of these three friends violate the property of "more is better" for junior mints? Or do the three of them satisfy this property? Explain. d) What can you say about the marginal utility of junior mints of these group of friends? Do the follow the same pattern? Is it possible that any of the three friends have the exact same preferences and that columns for the three friends differ only because of the arbitrary units that are used to measure utility? Explain.
e) Do any of these three friends violate the property of "more is better" for junior mints? Or do the three of them satisfy this property? Explain. d) What can you say about the marginal utility of junior mints of these group of friends? Do the follow the same pattern? Is it possible that any of the three friends have the exact same preferences and that columns for the three friends differ only because of the arbitrary units that are used to measure utility? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Part c) and d) show full work
Transcribed Image Text:Anton, Betsy and Catherine are three college friends who regularly go the
movies. At the movies, they can purchase skittles (x) and junior mints (y). The table below display
the total utility each of them get from bundles of these two snacks (x, y).
Bundle
Anton's Anton's Betsy's
Utility
MU,
Utility
(1)
(2)
10
A(1.1)
B=(1,2)
C = (1,3)
D=(1,4)
17
E = (1,5) 17.5
14
16
10
10
9
8
7
Betsy's
MU,
(4)
Catherine's
(5)
10
12
15
19
24
Catherine's
MU,
(6)
a) Yesterday the three friends went to watch the Barbie movie and they purchased the same
bundle, bundle B= (1,2), with 1 bag of skittles and 2 bags of junior mints. Can you say
who of the three friends experienced the highest utility from consuming bundle B? Explain.
b) As you may have noticed, all bundles in the table contain 1 bag of skittles while they differ
in the number of bags of junior mints.
Fill in columns (2), (4) and (6) in the table by computing the marginal utility each friend
receives from choosing a bundle with one extra bag of junior mints (good y) while keeping
constant the number of bags of skittles (good x). That is, for each friend, first compute the
marginal utility from consuming bundle B (with 2 bags of junior mints) instead of bundle
A (with 1 bag of junior mints). Next row, the marginal utility from adding one extra bag of
junior mints and consuming bundle C instead of B. And so on.
[Hint: Review the concept of marginal utility and how we calculate it as
AUtility
AGood
c) Do any of these three friends violate the property of "more is better" for junior mints? Or
do the three of them satisfy this property? Explain.
d) What can you say about the marginal utility of junior mints of these group of friends? Do
the follow the same pattern? Is it possible that any of the three friends have the exact same
preferences and that columns for the three friends differ only because of the arbitrary units
that are used to measure utility? Explain.
X
Expert Solution
Step 1: Define the term marginal utility
Marginal utility:
Marginal utility is the additional unit that is added to the total utility. It is calculated by dividing the total utility by quantity.
When derivating the total utility function then marginal utility is obtained.
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