QUESTION 1 1. Consider the following data from the table about a consumer. You have $16 to spend on dessert Price of Ice Cream = $2 per scoop Price of Cake: $4 per slice Quantity of TU Ice MU Ice MU/P Quantity Ice Cream Cream Cream TU MU MU/P of cake Cake Cake 1 4 1 10 2 3 2 8 3 2 3 6 4 1 A 4 5 0 5 2 The amount of total utility you'd enjoy at that level of consumption What is: A. The marginal utility adjusted for price for a quantity of 4 ice cream? B. What is the total utility of 5 slices of cake? C. What will be the optimal consumption bundle in this example Cream Cake Ice

QUESTION 1 1. Consider the following data from the table about a consumer. You have $16 to spend on dessert Price of Ice Cream = $2 per scoop Price of Cake: $4 per slice Quantity of TU Ice MU Ice MU/P Quantity Ice Cream Cream Cream TU MU MU/P of cake Cake Cake 1 4 1 10 2 3 2 8 3 2 3 6 4 1 A 4 5 0 5 2 The amount of total utility you'd enjoy at that level of consumption What is: A. The marginal utility adjusted for price for a quantity of 4 ice cream? B. What is the total utility of 5 slices of cake? C. What will be the optimal consumption bundle in this example Cream Cake Ice

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. If peanut butter brings you 30 utils of pleasure for the last dollar's worth, and the last dollar you spend on jelly brings you 15 utils of pleasure, what do you do? How does this relate to the law of diminishing marginal utility?
Bob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20 and his marginal utility from an additional unit of housing is 180. Furthermore, suppose the price of a unit of food is $1.00 and the price of a unit of housing is $2.00. Can Bob increase his utility without changing his total expenditures on food and housing? Holding expenditures constant, A. Bob can increase utility by spending more on food and less on housing. B. Bob can increase utility by spending more on food and the same amount on housing. C. Bob can increase utility by spending less on food and more on housing. D. Bob cannot increase his utility. E. Bob can increase utility by spending more on food and more on housing.
The following table reflects the utility one receives from consuming a given product. Units Consumed Total Utility (TU) Marginal Utility (MU) 0 0 ------- 1 60 60 2 ____ 50 3 150 ____ 4 175 ____ 5 ____ 20 6 210 ____ Complete the table solving for the missing total utility or marginal utility values in each row. Total utility increases throughout the table. What rate does total utility increase? In other words, is it rising at an increasing rate, a…
Who determines how much utility an individual will receive from consuming a good?
Question 5 Andrew is currently spending all his income on 2 goods, burgers and Pepsi. He buys burgers at 4 L.E. a unit, with a total utility of 1000 and a marginal utility of 24. He buys Pepsi at 1 L.E a unit with a total utility of 800 and a marginal utility of 18. In order of reach consumer equilibrium, he should consume: The same amount of burgers and Pepsi. More Pepsi but the same amount of burgers. More Pepsi and less burgers. More burgers but the same amount of Pepsi. More burgers and less Pepsi.
1. Carefully explain how consumers maximize utility of all the products they could possibly purchase.
If a consumer's marginal utility was 10 utils per unit of meat and 5 utils per unit of potatoes: a. the consumer should purchase less potatoes and more meat to maximize his satisfaction. b. the consumer would be in equilibrium if the per-unit price of meat was twice the price of potatoes. c. the consumer would be in equilibrium if the price per unit of meat was half the price of potatoes. d. the consumer's total utility could be increased by consuming more potatoes and less meat until the marginal utilities of the two goods were equal.
Question 2
How does the law of diminishing marginal utility relate to changing income? Select one: a. The marginal benefit of an extra dollar of income rises as income rises. b. The marginal benefit of an extra dollar of income falls as income rises. c. The total utility gained from a small income is higher than the total utility gained from a high income. d. The total utility gained from a high income is higher than the total utility gained from a low income.