i The total utility schedule of Sharon is given below for the number of shoes she consumes. a. Calculate Sharon’s marginal utility schedule. b. Plot a graph of total and marginal utility. c. What is the maximum number of shoes that Sharon will consume? Explain
1 i The total utility schedule of Sharon is given below for the number of shoes she
consumes.
a. Calculate Sharon’s
b. Plot a graph of total and marginal utility.
c. What is the maximum number of shoes that Sharon will consume?
Explain
ii.Assume that Mania has $1,200 per month to spend between dinners at a
Japanese restaurant and evenings at Cru, a local bar. Assume that going to Cru
costs $25 and eating at the restaurant costs $14.
a. Draw Mania’s budget constraint with restaurants on the horizontal axis.
b. Suppose Mania comes into some money and can now spend an extra
$200 per month. Draw her new budget constraint.
c. Suppose the price of restaurants decrease to $12, while her income and
the price of Cru is unchanged. Illustrate what happens to her budget
line.
Step by step
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b (I). Suppose Mania comes into some money and can now spend an extra
$200 per month. Draw her new budget constraint.
II. Suppose the
the price of Cru is unchanged. Illustrate what happens to her budget
line.
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