**Marginal Utility and Consumer Choice**The table below illustrates the marginal utility schedules for Product X and Product Y for a hypothetical consumer. The price of Product X is $3, and the price of Product Y is $2. The total income available to the consumer is $18.| Product X | | Product Y | ||-----------|------|-----------|------|| Quantity | MUₓ | Quantity | MUᵧ || 1 | 32 | 1 | 24 || 2 | 28 | 2 | 20 || 3 | 24 | 3 | 16 || 4 | 20 | 4 | 12 || 5 | 16 | 5 | 8 |**Explanation:**- **Marginal Utility (MU)**: Marginal utility refers to the additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service. - **Product X and Product Y**: The table shows how the marginal utility diminishes with each additional unit consumed for both products.- **Income Constraint**: The consumer has $18 to spend and must allocate their budget between product X and product Y to maximize total utility.**Educational Objective:**Understand how marginal utility influences consumer decisions and how budget constraints impact the allocation of resources between two products. **Multiple Choice Question: Consumer Purchase Behavior**If the consumer buys product X or product Y one unit at a time, which of the following will the consumer's first two purchases be?1. ○ a first unit of X followed by a first unit of Y 2. ○ a first unit of X followed by a second unit of X 3. ○ a first unit of Y followed by a second unit of Y 4. ○ a first unit of Y followed by a first unit of X *Select the most appropriate purchasing sequence.*

Utility is a term used in microeconomics to describe the relationship between the amount of…

If the consumer buys product X or product Y one unit at a time, which of the following will the consumer's first two purchases be? Multiple Choice a first unit of X followed by a first unit of Y a first unit of X followed by a second unit of X a first unit of Y followed by a second unit of Y a first unit of Y followed by a first unit of X

If the consumer buys product X or product Y one unit at a time, which of the following will the consumer's first two purchases be? Multiple Choice a first unit of X followed by a first unit of Y a first unit of X followed by a second unit of X a first unit of Y followed by a second unit of Y a first unit of Y followed by a first unit of X

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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**Marginal Utility and Consumer Choice**

The table below illustrates the marginal utility schedules for Product X and Product Y for a hypothetical consumer. The price of Product X is $3, and the price of Product Y is $2. The total income available to the consumer is $18.

| Product X | | Product Y | |
|-----------|------|-----------|------|
| Quantity | MUₓ | Quantity | MUᵧ |
| 1 | 32 | 1 | 24 |
| 2 | 28 | 2 | 20 |
| 3 | 24 | 3 | 16 |
| 4 | 20 | 4 | 12 |
| 5 | 16 | 5 | 8 |

**Explanation:**

- **Marginal Utility (MU)**: Marginal utility refers to the additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service.

- **Product X and Product Y**: The table shows how the marginal utility diminishes with each additional unit consumed for both products.

- **Income Constraint**: The consumer has $18 to spend and must allocate their budget between product X and product Y to maximize total utility.

**Educational Objective:**

Understand how marginal utility influences consumer decisions and how budget constraints impact the allocation of resources between two products.

**Multiple Choice Question: Consumer Purchase Behavior**

If the consumer buys product X or product Y one unit at a time, which of the following will the consumer's first two purchases be?

1. ○ a first unit of X followed by a first unit of Y
2. ○ a first unit of X followed by a second unit of X
3. ○ a first unit of Y followed by a second unit of Y
4. ○ a first unit of Y followed by a first unit of X

*Select the most appropriate purchasing sequence.*

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