Scenario 4.1: Daniel derives utility from only two goods, cake (Qc) and donuts (Qd). The marginal utility that Daniel receives from cake (MUC) and donuts (MUD) are given as follows: MUC = Qd MUD = Qc Daniel has an income of $240 and the price of cake (PC) and donuts (Pd) are both $3. 4) See Scenario 4.1. Holding Daniel's income and Pd constant at $240 and $3 respectively, what is Daniel's demand curve for cake? A) Qc = 240 - Pc B) Qc = 240/Pc C) Qc = 120/Pc D) Qc = 240/(3 + Pc) E) none of the above

Scenario 4.1: Daniel derives utility from only two goods, cake (Qc) and donuts (Qd). The marginal utility that Daniel receives from cake (MUC) and donuts (MUD) are given as follows: MUC = Qd MUD = Qc Daniel has an income of $240 and the price of cake (PC) and donuts (Pd) are both $3. 4) See Scenario 4.1. Holding Daniel's income and Pd constant at $240 and $3 respectively, what is Daniel's demand curve for cake? A) Qc = 240 - Pc B) Qc = 240/Pc C) Qc = 120/Pc D) Qc = 240/(3 + Pc) E) none of the above

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 8SQP

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b) Diana has $6.00 to spend. She has the option to buy two goods: sandwiches and peppermints. Sandwiches cost $3.00 each, and peppermints cost $1.00 per pack. The table below shows the utility Diana derives from consuming sandwiches or peppermints at various levels of consumption. In the table below, compute and complete the table below for the marginal utility per dollar for each level of consumption. i. Peppermints Marginal Utility/ $ (price per each) Sandwiches Marginal Utility Marginal utility/ $ (price per each) Marginal Utility Units purchased 1 9 15 9 3 4 4 n/a n/a 1 ii. Briefly explain how Diana should spend the first $3.00.
Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6. Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint?
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem, 27 units of marginal utility from her second poem, 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her first three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumbers consumed. A poem costs three bronze coins but a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the…
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem, 27 units of marginal utility from her second poem, 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her first three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumbers consumed. A poem costs threebronzecoinsbutacucumbercostsonlyonebronze coin. Praxilla has 18 bronze coins. Sketch Praxilla’s budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems…