Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the marginal utilities in utils that Sarah derives from consuming two goods, snacks, and movies. Quantity of Snacks 0 1 2 3 4 5 6 Marginal Utility of Snacks 20 18 15 12 10 8 Quantity of Movies 0 1 2 3 4 5 6 Marginal Utility of Movies 50 35 24 20 15 10 Sarah has a limited weekly income of $50, and she spends it all on snacks and movies Assume the price of snacks is $5 per unit, the price of a movie ticket is $10, and Sarah is a utility-maximizing consumer. (a) Would Sarah be able to consume 3 snacks and 5 movies? Explain using numbers. (b) How many snacks and movies will Sarah consume to maximize her utility? Explain using marginal analysis. (c) Calculate the total utility Sarah will receive from consuming the utility-maximizing combination of snacks and movies indicated in your answer in part (a). Show your work.

Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the marginal utilities in utils that Sarah derives from consuming two goods, snacks, and movies. Quantity of Snacks 0 1 2 3 4 5 6 Marginal Utility of Snacks 20 18 15 12 10 8 Quantity of Movies 0 1 2 3 4 5 6 Marginal Utility of Movies 50 35 24 20 15 10 Sarah has a limited weekly income of $50, and she spends it all on snacks and movies Assume the price of snacks is $5 per unit, the price of a movie ticket is $10, and Sarah is a utility-maximizing consumer. (a) Would Sarah be able to consume 3 snacks and 5 movies? Explain using numbers. (b) How many snacks and movies will Sarah consume to maximize her utility? Explain using marginal analysis. (c) Calculate the total utility Sarah will receive from consuming the utility-maximizing combination of snacks and movies indicated in your answer in part (a). Show your work.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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