Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 10, Problem 5P
To determine
To show:
The Rene's total utility and
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Students have asked these similar questions
If marginal utility is declining but still positive, total utility is increasing.
True or false and explain
The relationship between the marginal utility that George gets from eating a bag of cookies and the number of bags he eats per
month is as follows:
Bags of
Cookies
1
2
3
4
S
6
Marginal
Utility
20
16
12
8
4
0
George receives 2 units of utility from the last dollar spent on each of the other goods he consumes. If cookies cost $4 per bag, how
many bags of cookies will he consume per month if he maximizes utility?
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Integer, decimal, or E notation allowed
Question 10
If the utility function for the consumer is:
U= min{10 x1, 50 x2}
P₁= 4, P₂-6 and 1-2,000
What is the optimal amount of x₁?
10 Points
Define Utility in your own words.What does it mean to have diminishing marginal utility?How do you calculate Marginal Utility? What is the formula?What is the utility maximizing rule? Describe the rule as well as state it mathematically.
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Similar questions
- Positive marginal utility is when the marginal utility increases the total utility whereas negative marginal utility is when the consumption of an additional unit reduces the amount of the total utility. Is it true or false?arrow_forwardComplete the following table. Instructions: Enter your answer for total utility as a whole number and your answer for marginal utility rounded to one decimal place. Units Total Marginal Utility Consumed Utility 10 32 3.2 20 2.8 30 86 40 111 50 2.4 60 158arrow_forwardSuppose that you observe that total utility rises as more of an item is consumed You can say for sure that marginal utility is Marginal utility is alsoarrow_forward
- Complete the following table. Instructions: Enter your answer for total utility as a whole number and your answer for marginal utility rounded to one decimal place Marginal utility Units Consumed Total utility a e 10 66 6.6 20 6.4 30 193 64 40 254 62 50 310 5.8 60 365 54arrow_forwardWhen marginal utility is decreasing but positive, total utility is a increasing at a decreasing rate b increasing at an increasing rate c decreasing at a decreasing rate d decreasing at an increasing ratearrow_forwardDefine and explain the relationship between total utility, marginal utility, and the law of diminishing marginal utility.arrow_forward
- 1. Jan has the following utility function for broccoli: U(B) = 54B - 0.5B³ a) What is Jan's marginal utility function?arrow_forwardIs it possible for marginal utility to be negative while total utility is positivearrow_forwardExplain the difference between marginal utility and total utilityarrow_forward
- The marginal utility for the third unit of X is 60 utils, and the marginal utility for the fourth unit of X is 45 utils. If the law of diminishing marginal utility holds, what is the minimum total utility?arrow_forwarduestion1:Donna and Jim are two consumers purchasing strawberries and chocolates. Jim’s utility function is U (x, y) = xy and Donna’s utility function is U (x, y) = x2y where x denotes strawberries and y denoteschocolates. Jim’s marginal utility functions are MUX=y and MUy=x while Donna’s are MUX=2xy and MUy=x2. Jim’s income is $100, and Donna’s income is $150. What is the optimal bundle for Donna if the price of strawberries is $2 and the price of chocolate is $4? What is the optimal bundle for Jim, and for Donna, when the price of strawberries rises to $3?Question2:Consider a one-period ecoarrow_forwardDescribe Marginal Utility and Diminishing Marginal Utility? Include a detailed example using a table.arrow_forward
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