EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 20, Problem 20.1LO
To determine
The difference between total utility and
Expert Solution & Answer
Explanation of Solution
Total utility refers to the total satisfaction a person derives from the consumption of various units of a commodity, whereas, marginal utility refers to the additional satisfaction (in utils) a person receives when he consumes an additional unit of the same commodity.
Marginal utility first rises and then declines due to the working of the law of diminishing marginal utility. Which states that as a person goes on consuming more and more units of the same commodity, his satisfaction increases and then starts declining. This is why the marginal utility first rises and then declines.
Economics Concept Introduction
Concept Introduction:
Law of Diminishing Marginal Utility - States that when a person goes on consuming the same commodity without a time gap, the satisfaction that he derives from every additional unity of the commodity keeps falling.
Marginal Utility- It refers to the additional utility a person derives from an additional unit of consumption.
Total utility- It refers to the total satisfaction (in utils) a person as derived from the consumption of over all units of a commodity.
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Question 6 of 18
>
The graph shows the average total cost (ATC) curve, the
marginal cost (MC) curve, the average variable cost (AVC)
curve, and the marginal revenue (MR) curve (which is also
the market price) for a perfectly competitive firm that
produces terrible towels. Answer the three questions,
assuming that the firm is profit-maximizing and does not shut
down in the short run.
What is the firm's total revenue?
S
What is the firm's total cost?
$
What is the firm's profit? (Enter a negative number for a loss.)
$
Price
$320
$300
$200
$150
205 260
336
365
Quantity
MC
ATC
AVC
MR=P
1. Suppose that the two nations face the following benefits of pollution, B, and costs of
abatement, C: BN = 10, Bs = 7; CN = 5, Cs = 4. Further assume that if the nation chooses to
abate pollution, it still receives the benefits of pollution but now must pay the cost of
abatement as well.
a. Identify the payoffs that accrue to each nation under the four different possible
outcomes of the game and present these payoffs in the normal form of the game.
b. Recall that the term dominant strategy defines the condition that a player in a game
would prefer to play that strategy (in this case either pollute or abate) regardless of
the strategy chosen by the other player in the game. Does either nation have a
dominant strategy in this game? If so, what is it?
c. Identify the Nash equilibria, or non-cooperative equilibria, of this game.
Chapter 20 Solutions
EBK ECONOMICS TODAY
Ch. 20.F - Prob. 1PCh. 20.F - Prob. 2PCh. 20.F - Prob. 3PCh. 20.F - Prob. 4PCh. 20.F - Prob. 5PCh. 20.F - Prob. 6PCh. 20.F - Prob. 7PCh. 20.F - Prob. 8PCh. 20.F - Prob. 9PCh. 20.F - Prob. 10P
Ch. 20 - Prob. 20.1LOCh. 20 - Prob. 20.2LOCh. 20 - Prob. 20.3LOCh. 20 - Prob. 20.4LOCh. 20 - Prob. aFCTCh. 20 - Prob. bFCTCh. 20 - Prob. cFCTCh. 20 - Prob. 1CTQCh. 20 - Prob. 2CTQCh. 20 - Prob. 1FCTCh. 20 - Prob. 2FCTCh. 20 - Prob. 1PCh. 20 - Prob. 2PCh. 20 - Prob. 3PCh. 20 - Prob. 4PCh. 20 - Prob. 5PCh. 20 - Prob. 6PCh. 20 - Prob. 7PCh. 20 - Prob. 8PCh. 20 - Prob. 9PCh. 20 - Prob. 10PCh. 20 - Prob. 11PCh. 20 - Prob. 12PCh. 20 - Prob. 13PCh. 20 - Prob. 14PCh. 20 - Prob. 15PCh. 20 - Prob. 16PCh. 20 - Prob. 17P
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