17. The table shows Regina's marginal utility numbers for ham-burgers and pizzas. Regina is trying to decide which item topurchase first, a hamburger or a pizza, knowing that she wantsto receive the most utility for each dollar she spends. Assumingshe has enough money in her budget to purchase either item,which item should she purchase first?HAMBURGERS $4PIZZAS $6QUANTITYMUQUANTITYMU11211882143438

The utility or satisfaction obtained from consuming an additional unit of output is known as…

Answered: The table shows Regina's marginal…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are only two brands of tennis balls Tom purchases: "Wilson" and "Penn." The more he purchases of a ball, the lower the marginal utility of that ball. He spends all of his income and his marginal utility of a "Wilson" is 6 and his marginal utility of an "Penn" is 12. The price of a "Wilson" ball is $1 and the price of an "Penn" is $2. Which of the statements is true based on the above information? Question 19 options: Tom could increase his satisfaction by a) trading "Wilson" for "Penn." In equilibrium, Tom must give up b) three "Penn" balls for two "Wilson" balls. Tom can increase his satisfaction by c) doing nothing Tom would be willing to give up two d) "Penn" balls for one "Wilson" ball.
A consumer has a budget set aside for entertainment during the year, and they spend the budget on concerts and plays. The consumer has a strong preference for attending concerts over plays: the two activities are substitutes, but not very strong substitutes. Sketch the indifference curves for this consumer on a graph, with concert tickets on the vertical axis and play tickets on the horizontal axis. Briefly explain why the consumer might ultimately choose to purchase a large number of play tickets, even though they have a strong preference for concerts. Include a budget line on your graph to illustrate this case.
Larry and Teri allocate their consumption between two goods: hats and bats. The price of hats is €5 each, and the price of bats is €10 each. For Larry, the marginal utility of the last hat consumed was 8, and the marginal utility of the last bat was 24. For Teri, the marginal utility of the last hat was 6, and the marginal utility of the last bat was 12. Which consumer is not maximizing his/her utility? How can you tell? How should he/she change their allocation?

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