Price of candy New price of Price of ice cream cones = 5.00 2.50 candy = $ 1.25 Quantity of Ice Cream Total Utility Marginal Utility Marginal Utility per Quantity of Candy Marginal Utility Marginal Utility per Marginal Utility per Total Utility Cones Dollar Dollar Dollar 1 25 25 1 15 15 12 2 45 20 4 2 25 10 4 3 60 15 3 3 33 8 3.2 6.4 4 69 1.8 4 38 4 72 40 0.8 1.6
Price of candy New price of Price of ice cream cones = 5.00 2.50 candy = $ 1.25 Quantity of Ice Cream Total Utility Marginal Utility Marginal Utility per Quantity of Candy Marginal Utility Marginal Utility per Marginal Utility per Total Utility Cones Dollar Dollar Dollar 1 25 25 1 15 15 12 2 45 20 4 2 25 10 4 3 60 15 3 3 33 8 3.2 6.4 4 69 1.8 4 38 4 72 40 0.8 1.6
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Need help with drawing the demand curve
Transcribed Image Text:Price of candy
New price of
Price of ice cream cones =
2$
5.00
$
2.50
candy =
$ 1.25
|Quantity of
Ice Cream Total Utility
Marginal
Utility
Marginal
Utility per
|Quantity of
Candy
Marginal
Utility
Marginal
Utility per
Marginal
Utility per
Total Utility
Cones
Dollar
Dollar
Dollar
1
25
25
1
15
15
12
2
45
20
4
25
10
4
8
60
15
3
33
8
3.2
6.4
4
69
9
1.8
4
38
5
2
4
72
0.6
40
0.8
1.6
Expert Solution
Step 1
When price of ice cream cone is $5.00
Price of candy is $2.5
Then the optimum consumption will occur at point where quantity demanded is:-
2 cones of ice-cream and 2 units of candy.
When price of candy decreases from $2.5 to $1.25, quantity of candy demanded will increase from 2 units to 4 units.
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