If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of Multiple Choice increases from 2 to 4. stays the same at 2, but the consumer has $1 remaining. decreases from 4 to 3.

If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of Multiple Choice increases from 2 to 4. stays the same at 2, but the consumer has $1 remaining. decreases from 4 to 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Suppose a consumer has an income of $40, the price of A is $5, and the price of B is $4. Which of…

A: Here we calculate the combination of consumer budget line by using the given data and choose the…

Q: You have $4,000 to spend on entertainment this year (lucky you!). The price of a day trip (T) is $40…

A: a) The price of a day trip (T) is $40 and theprice of a pizza and a movie (M) is $20. Suppose that…

Q: If the total utility from consuming seven units of a product is 336 and the marginal utility of a…

A: Total utility means the amount of total satisfaction that a consumer gets from consuming the goods.…

Q: a) What is the utility maximizing choice of food and clothing? b) How would the utility maximizing…

A: For a consumer the utility function for two goods, food (F) and clothing (C) is given as: U(F, C) =…

Q: A consumer has $100 and would like to purchase food (F) and gas (G). Suppose their utility is given…

A: Given: U ( F,G ) = F 0.8 G 0.2 M= PF x F + PG x G 100 = PF x F + PGx G MUF= o.8 ( G / F ) 0.2 MUG…

Q: Joyce consumes x1 and x2 together in fixed proportions. She always consumes 1 unit of x2 for 2 units…

A: The utility function is the mathematical relationship between the utility and the amounts of various…

Q: Suppose the marginal utility for a $5 submarine sandwich is 100. In addition, the marginal utility…

A: When an individual has two goods to consume, his utility Maximizing situation is when he is getting…

Q: Think about a favorite thing you often buy or enjoy. It could be your favorite food, a favorite…

A: Suppose I buy chocolates in the course of a day. The largest utility I get is from consuming the…

Q: A consumer derives utility from good A and B according to the following utility function: U(A, B) =…

A: Utility maximization problem: With the given prices and income, a consumer chooses his consumption…

Q: A cup of Starbucks coffee is just as good as a cup of Dunkin Donuts coffee for me (assuming equal…

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

Q: Frank is purchasing products C and D in utility-maximizing amounts. If the price of C is $6 and the…

A: Given: Frank is making purchases of products C and D in profit maximizing amounts. Price of C=$6…

Q: Reid has the following utility function. U = 24m1/3d1/2 where U is Reid's total utility, m is the…

A: (a) U = 24m 1/3 d 1/2 – α (m+0.6 d -25) MU m = 1/3*24m-2/3 d 1/2 – α*1 MU d= ½ *24 m 1/3 d-1/2 -…

Q: A cup of Starbucks coffee is just as good as a cup of Dunkin Donuts coffee for me (assuming equal…

A: Two goods are substitutes in microeconomics if they may be utilised for the same purpose by the…

Q: If this consumer has $13.00 to spend on cans of beer and slices of pizza in any given week, then…

A: Answer: A consumer maximizes his/her utility where the following conditions are satisfied:…

Q: According to behavioral economics research, in which of the following cases would we expect a person…

A: Behavioral economics refers to the studies of the effects of psychological, emotional, cultural,…

Q: When marginal utility is decreasing but positive, total utility is a increasing at a decreasing…

A: Marginal utility is the additional utility that is derived by consuming an additional unit of the…

Q: a. Find Sam's utility maximizing choice of ice cream and video games. Also find his utility level…

A: In economics, the utility function measures the welfare or satisfaction of a consumer as a function…

Q: To maximize total utility, consumers will always choose the marginal unit of the good that yields…

A: Utility maximisation implied the concept that individuals and firms seek to get the highest…

Q: Hector has a budget for bottled water and soda pop. If the price of soda pop decreases, Hector will…

A: Hector is consuming two goods, i.e., bottled water and soda pop. He has a constant budget and fixed…

Q: 10 9 IC, 8 IC, 10 12 Good Y The utility a person gets from consuming an additional unit of Good Y at…

A: An indifference curve shows the various combinations of two goods that give the consumer equal…

Q: Joe Bob from Workout Problem 4.12 has a cousin Don who consumes goods 1 and 2. Don thinks that 3…

A: For Don, 3 units of good 1 is always the perfect substitute for 2 units of good 2. This implies that…

Q: Suppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is $1.50 per…

A: The ratio of the marginal utility of beef to pork can be calculated as follows:…

Q: If the marginal utility of the burger is greater than the price of the burger, we expect a rational…

A: Consumer surplus refers to the difference between the maximum amount that a consumer is willing to…

Q: (a)Complete the table by computing the marginal utility per dollar for successive units of X, Y, and…

Q: Positive marginal utility is when the marginal utility increases the total utility whereas negative…

A: Utility is characterised as the entire satisfaction a customer experiences when utilising a good or…

Q: A consumer is in equilibrium and is spending income in such a way that the marginal utility of…

A: The consumer is consuming two goods, X and Y in equilibrium. MU from X=20units MU from Y=35units…

Q: If the price of food is $20, the price of clothing is $80, and annual income is $60,000, determine…

A: To determine the optimal combination of food and clothing the consumer will purchase, we need to set…

Q: Amy is currently spending all of her budget and she finds that the marginal utility per dollar from…

A: We are going to discuss significance of marginal utility pe dollar to answer the question.

Q: Calculate the Marginal Utility of Y What is the optimal Choice of X and Y given the PX = $6, PY = $2…

A: Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good…

Q: Don Trump, a consumer in Washington, D.C. purchases a combination of products Y and Z and that the…

A: Utility is maximum where the marginal utility per dollar of one good is equal to the marginal…

Q: Caroline has a $10 dessert budget that she uses to buy pie and cake. Assume the price of pie (Pp) is…

A: If the price of the slice of cake is $4....., she will choose to buy 3 slices of pie and 1 slice of…

Q: Given above are some of the indifference curves for a student who consumes Burritos and Pizzas and…

A: The utility function refers to all those commodity bundles that derive the same amount of utility…

Question

The table shows the total utility data for products S and T. Assume that the prices of S and T are $3 and $5, respectively, and that consumer income is $22.
Total Utility
12
27
39
48
51
Units of S
1
2
3
4
5
Multiple Choice
If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of T
increases from 2 to 4.
Units of T
1
2
3
4
5
Total Utility
20
35
45
50
52
decreases from 4 to 3.
stays the same at 2, but the consumer has $1 remaining.
increases from 2 to 3, but the consumer has $1 remaining.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: explenation

VIEW

Step 2: Marginal utility

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 10 and the marginal utility of Y is 8. The unit price of X is $5 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should
Amy consumes x and y and her preferences can be represented by the following utility function U(x,y) = 4x + y. 1. Are Amy's preferences transitive? 2. Does the marginal utility of x diminish, remain constant, or increase as the consumer buys more x? Explain. 6- 3. Can you use (2) to answer whether Amy's preferences are strictly monotonic? 4. What is MRS.y ? Is MRSx.y diminishing, constant, or increasing as the consumer substitutes x for y along an indifference curve? 5. On a graph with x on the horizontal axis and y on the vertical axis, draw a typical indifference curve. Also indicate on your graph whether the indifference curve will intersect either or both axes. Label the curve U1. 6. Are Amy's preferences convex? Are they strictly convex? Explain
Given Utility function U=20Q-2Q^2, what quantity of good gives highest utility for the consumer? What will happened if the consumer obtains more quantity than the one you computed?
Suppose the marginal utility of a Coke is 15 utils, and its price is $1.50. The marginal utility of a pizza is 20 utils, and its price is $5. To achieve consumer equilibrium, you need to spend
You like candy and cake. After using your entire $30 budget at the sugar store, you find that the marginal utility from the last candy you consumed was 60 and the last piece of cake was 30. Assuming you have maximized your utility and the price of a piece of candy is $4, calculate the price of cake? Do not enter dollar signs. Answer:
Gino derives utility from only two goods, carrots (Qc) and donuts (Qd). His utility function is as follows:U(Qc,Qd) = (Qc)(Qd)The marginal utility that Donald receives from carrots (MUc) and donuts (MUd) are given as follows:MUc = Qd MUd = QcGino has an income (I) of £120 and the price of carrots (Pc) and donuts (Pd) are both £1. - suppose a lump sum tax of the same dollar amount, of a 1 pound tax per unit on donuts, is levied on Gino. what is Gino's utility maximising market basket? - why would Gino prefer a per unit tax over the lump sum tax, or vice versa, or why is he indifferent between the two taxes.
Which of the following statements is true? Group of answer choices If the more is better assumption is satisfied, the marginal utility from consuming the second unit must be greater than the marginal utility from consuming the first unit. Marginal utility is the slope of total utility. If the more is better assumption is satisfied, total utility will increase as consumption increases. Marginal utility may be negative.
The income of a consumer is $40, the price of A is $2, and the price of B is $6. If the quantity of A is measured vertically, then the slope of the budget line is Multiple Choice −3.0. −0.5. −0.33. −2.5.
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.