The table below shows the marginal beneht, in dollars, that Kareem derives from consuming two goods, Good X and cereal. Use this information to answer parts (D-G). Quantity Marginal Benefit of Good X Quantity Marginal Benefit of Good X of Cereal of Cereal S18 $32 S16 $28 $12 $24 4 $6 4 $20 $2 $16 $12 Kareem has a limited weekly income of $18, and he spends it all on Good X and cereal. Assume the price of Good X is $2 per unit and the price of cereal is $4 per unit. (1) Given his weekly income, would Kareem be able to buy 3 units of Good X and 5 units of cereal? Explain using numbers. (g) Calculate the total consumer surplus from Good X if Kareem consumes 4 units of Good X. Show your work. (h) Identify the quantity of Good X and the quantity of cereal that will maximize Kareem's total benefit given his weekly income. Explain using marginal analysis. Assume Good X is produced in a perfectly competitive market and that there is a decrease in the number of consumers in the market for Good X. 1) Will the quantity of Good X that will maximize Kareem's total benefit increase, decrease, or stay the same? Explain. ) Would Kareem's total consumer surplus from Good X if he consumes 4 units of Good X increase, decrease, or stay the same compared to your answer in part (g) ? Explain. 2.
The table below shows the marginal beneht, in dollars, that Kareem derives from consuming two goods, Good X and cereal. Use this information to answer parts (D-G). Quantity Marginal Benefit of Good X Quantity Marginal Benefit of Good X of Cereal of Cereal S18 $32 S16 $28 $12 $24 4 $6 4 $20 $2 $16 $12 Kareem has a limited weekly income of $18, and he spends it all on Good X and cereal. Assume the price of Good X is $2 per unit and the price of cereal is $4 per unit. (1) Given his weekly income, would Kareem be able to buy 3 units of Good X and 5 units of cereal? Explain using numbers. (g) Calculate the total consumer surplus from Good X if Kareem consumes 4 units of Good X. Show your work. (h) Identify the quantity of Good X and the quantity of cereal that will maximize Kareem's total benefit given his weekly income. Explain using marginal analysis. Assume Good X is produced in a perfectly competitive market and that there is a decrease in the number of consumers in the market for Good X. 1) Will the quantity of Good X that will maximize Kareem's total benefit increase, decrease, or stay the same? Explain. ) Would Kareem's total consumer surplus from Good X if he consumes 4 units of Good X increase, decrease, or stay the same compared to your answer in part (g) ? Explain. 2.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Please answer just parts i and j
Transcribed Image Text:The table below shows the marginal beneht, in dollars, that Kareem derives from consuming two
goods, Good X and cereal. Use this information to answer parts (D-G).
Quantity Marginal Benefit
of Good X
Quantity Marginal Benefit
of Good X
of Cereal
of Cereal
S18
$32
S16
$28
$12
$24
4
$6
4
$20
$2
$16
$12
Kareem has a limited weekly income of $18, and he spends it all on Good X and cereal. Assume
the price of Good X is $2 per unit and the price of cereal is $4 per unit.
(1) Given his weekly income, would Kareem be able to buy 3 units of Good X and 5 units of
cereal? Explain using numbers.
(g) Calculate the total consumer surplus from Good X if Kareem consumes 4 units of Good X.
Show your work.
(h) Identify the quantity of Good X and the quantity of cereal that will maximize Kareem's total
benefit given his weekly income. Explain using marginal analysis.
Assume Good X is produced in a perfectly competitive market and that there is a decrease in the
number of consumers in the market for Good X.
1) Will the quantity of Good X that will maximize Kareem's total benefit increase, decrease, or
stay the same? Explain.
) Would Kareem's total consumer surplus from Good X if he consumes 4 units of Good X
increase, decrease, or stay the same compared to your answer in part (g) ? Explain.
2.
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