On the following graph, use the purple points (diamonds symbol) to plot Kenji's total utility (TU) curve if he consumes zero, one, two, three, four, five, or six pairs of shoes per month. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ? 150 135 120 105 ४ TOTAL UTILITY (Utils) 90 75 60 45 8 30 + 15 0 0 2 3 SHOES (Pairs) 4

On the following graph, use the purple points (diamonds symbol) to plot Kenji's total utility (TU) curve if he consumes zero, one, two, three, four, five, or six pairs of shoes per month. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ? 150 135 120 105 ४ TOTAL UTILITY (Utils) 90 75 60 45 8 30 + 15 0 0 2 3 SHOES (Pairs) 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to the table below. If the subscription price for a sports app is $2 per week, the subscription price of a game app is $1 per week, and a student has $9 per week to spend, what quantities will she purchase at a consumer optimum? Quantity of Sports Apps per week Marginal Utility (utils) Quantity of Game Apps per Week Marginal Utility (utils) 1 1,200 1 1,700 2 1,000 2 1,400 3 800 3 1,100 4 600 4 800 5 400 5 500 6 100 6 200
Suppose Al is currently consuming five movies and two concerts per month. If his utility function is given by U = 15MC, where Mrepresents the number of movies seen and C represents the number of concerts attended, Al's total utility is equal to: 75 15 150 10 30
Consider the figures to the right. Suppose that the individual currently consumes 5 digital apps. What happens to the person's total utility if they reduce their consumption to 4 units? Why does this fact imply that the marginal utility curve cuts through the horizontal axis of the lower figure between the fourth and fifth app consumed? Reducing consumption to 4 apps from 5 apps leaves total utility at utils in the upper , which is the figure. Hence, the marginal utility between these two quantities of apps equals value of the axis in the lower figure. Thus, the marginal utility curve crosses the axis of the lower figure between units 4 and 5. (Enter your responses as whole numbers.) Marginal Utility (utils per week) 6- 4- 22 Total Utility (utils + q r per week) 14- 12- 10- 20 ø Ø 18- 04 0 Downloaded Digital Apps Utilized per Week Downloaded Digital Apps Utilized per Week G Q
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c) From the following budget line and the utility function, calculate the amount of two commodities that maximizes satisfaction. What is the maximum amount of satisfaction? 2500= 20X + 30Y U = 300 X0.6Y0.7
You are in the market for a new couch and havefound two advertisements for the kind of couchyou want to buy. One seller notes in her ad that sheis selling because she is moving to a smaller apartment, and the couch won’t fit in the new space.The other seller says he is selling because the couchdoesn’t match his other furniture. Which seller doyou expect to buy from? Why? ( Hint: Think whowould be the more motivated seller.)
Suppose that U(f,c) = f + 8c^(1/2)is a utility function that describes Amelia’s preferences over two goods: fish(f)and custard (c). For the following, think of fish as the good graphed on the horizontal axis.a. Derive an expression for her marginal utility (Uf)from a small increase in f holding c fixed. Also find themarginal utility for custard (Uc).b. What is Amelia’s marginal rate of substitution (MRS)? Give a brief (2 sentences maximum) intuitivedescription of what MRS represents. If Amelia has 4 units of custard, holding her utility constant, howmany units of custard would she be willing to give up in order to get one more unit of fish?c. Graph Amelia’s indifference curve for a utility level of 40. Be sure to specify at least 3 bundles of goodson the indifference curve.d. Does the fact that Amelia’s indifference curve intersects with the custard axis violate any of the 5properties of indifference curves? Briefly support your answer.e. Give another utility function that represents…
Jackie has a budget of $36 per month to spend on snacks. She can spend this budget on bags of potato chips (C) and Hershey chocolate bars (H). Potato chips cost $4 per bag, while Hershey bars cost $1 per bar. The utility that Jackie receives from consuming potato chips and Hershey bars is represented by the following utility function: U=3C2 H. Given that Jackie seeks to maximize her utility, find the number of potato chip bags and Hershey chocolate bars that Jackie will purchase each month.
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Enrique is a movie buff. He likes to watch on demand movies from his cable company, which cost $5 each, and so likes to go to the local movie house, which charges $15 a ticket. Suppose that given his budget and his tentative spending plans, the marginal utility from a cable movie is 15 utils and the marginal utility of a movie at the local cinema is 45 utils. Assuming he is spending his entire budget, Enrique is currently maximizing his utility Enrique can increase his utility by buying more cable movies and watching fewer cinema movies Enrique can increase his utility by buying more cinema movies and fewer cable movies
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