Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Chapter 5, Problem 5TY
To determine
Calculate how many baskets Person J would buy.
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Suppose that strawberries sell for $3 per basket. Jim is considering whether to buy zero, one, two, three or four baskets. On your own, create a plausible set of total and marginal utility numbers for the different quantities of strawberries and arrange them in a table. From your table, calculate how many baskets Jim would buy
Suppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is $1.50 per pound , and pork is $2.00 per pound. Assuming you have studied economics and achieved consumer equilibrium, what is the ratio of the marginal utility of beef for the marginal utility of pork?
Suppose utility can be measured by "utils" and that Jim buys both coffee and bagels. The price of coffee is $2 and the price of a bagel is $3. If Jim is currently consuming coffee and bagels such that the marginal utility from the last cup of coffee consumed was 6 utils and the marginal utility from the last bagel consumed was 12 utils, is Jim maximizing utility? Why or why not? If not, what should Jim do? Explain in detail.
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Economics: Principles and Policy (MindTap Course List)
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- The table below shows the marginal utility from consuming mini pizzas and sodas. If pizzas and soda are the only goods and the price of a mini pizza is $1 and the price of a soda is $.50, how many of each will maximize utility if you have $4 for lunch?arrow_forwardAri intends to purchase a new car and has narrowed it down to a Dodge Ram truck or a Toyota Camry. A Dodge Ram truck costs $55000 while a Toyota Camry costs $20000. The utility that Ari will get from Dodge Ram truck is 12500 while Toyota Camry will generate a utility of 2500. Note: A purchase generating utility tells us the marginal utility of the good. What is the Marginal Utility per Dollar for Dodge Ram truck? What is the Marginal Utility per Dollar for Toyota Camry? Will Ari be better off buying a Dodge Ram truck or a Toyota Camry? ODodge Ram truck OToyota Camry Aarrow_forwardJesse has a budget of $16 to spend on either ice cream or cookies at the movie theater. A scoop of ice cream costs $4 while cookies costs $2. Use the table below to identify the utility maximizing quantity of ice cream and cookies given Jesse’s budget constraint. HINT: Use utility maximizing formula, MU1/P1 = MU2/P2 Ice cream (Quantity) Total Utility Cookies (Quantity) Total Utility 1 8 1 20 2 12 2 35 3 24 3 56 4 30 4 60 5 32 5 62 6 35 6 68 Group of answer choices 2 ice cream and 4 cookies 1 ice cream and 5 cookies 3 ice cream and 6 cookiesarrow_forward
- The following table shows Madison's utility from consuming popcorn and Coke. Suppose that Madison has income of $30.00, the price of popcorn is $6.00, and the price of Coke is $9.00. If Madison wants to maximize her utility, how much popcorn and Coke should she buy? Coke Marginal Utility 144 108 72 36 18 9 Quantity 2 3 4 5 6 Popcorn Marginal Utility 96 72 48 24 12 6 Madison should buy boxes of popcorn and cans of Coke. (Enter your responses as integers.)arrow_forwardThe table below represents how Marco feels about chocolate candy bars. a. Fill in the missing values for total utility and marginal utility. Instructions: Enter your answers as a whole number. Chocolate Candy Bars and Marco's Utility Chocolate Candy Total Utility Bars (utils) 0 0 1 27 2 3 4 5 6 (Click to select) 60 ♦ 76 Marginal Utility (utils) 27 19 Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda, which gives him 28 utils of happiness, or two additional candy bars. b. Which is he likely to prefer? 6 1arrow_forwardWhat is the axiom of consumer choice that implies that consumers spend all their income in order to maximize utility? No more than 4 linesarrow_forward
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