1. What is the Total Utility of the second unit?
2. What is the
3. Explain the relationship between Total Utility and Marginal Utility.
4. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?
5. “It is possible that a rational consumer will not purchase any units of the product represented by these data.” Do you agree? Explain why or why not.
6. In the last decade or so there has been a dramatic expansion of small retail convenience stores (such as 7 Eleven, Kwik Shop, and Circle K), although their prices are generally much higher than prices in large supermarkets. What explains the success of the convenience stores?
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