The total utility schedule of Sharon is given below for the number of shoes she consumes. i. Calculate Sharon’s marginal utility schedule. ii. Plot a graph of total and marginal utility. iii. What is the maximum number of shoes that Sharon will consume? Explain Number of Shoes Total Utility Marginal Utility 1 100 2 200 3 275 4 325 5 350 6 360 7 360 8 355 b. Assume that Mania has $1,200 per month to spend between dinners at a Japanese restaurant and evenings at Cru, a local bar. Assume that going to Cru costs $25 and eating at the restaurant costs $14. a. Draw Mania’s budget constraint with restaurants on the horizontal axis. b. Suppose Mania comes into some money and can now spend an extra $200 per month. Draw her new budget constraint. c. Suppose the price of restaurants decrease to $12, while her income and the price of Cru is unchanged. Illustrate what happens to her budget line.
The total utility schedule of Sharon is given below for the number of shoes she
consumes.
i. Calculate Sharon’s
ii. Plot a graph of total and marginal utility.
iii. What is the maximum number of shoes that Sharon will consume?
Explain
Number of Shoes Total Utility Marginal Utility
1 100
2 200
3 275
4 325
5 350
6 360
7 360
8 355
b. Assume that Mania has $1,200 per month to spend between dinners at a
Japanese restaurant and evenings at Cru, a local bar. Assume that going to Cru
costs $25 and eating at the restaurant costs $14.
a. Draw Mania’s budget constraint with restaurants on the horizontal axis.
b. Suppose Mania comes into some money and can now spend an extra
$200 per month. Draw her new budget constraint. c. Suppose the price of restaurants decrease to $12, while her income and the price of Cru is unchanged. Illustrate what happens to her budget
line.
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