Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 6, Problem 2MC
To determine
The correct statement regarding the law of diminishing the marginal value.
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Students have asked these similar questions
(9)
What determines the utility an individual receives from consuming a good?
Select one:
a. The individual’s own preferences.
b. The demand and supply curves for that good.
c. The producers conducting customer feedback surveys of that good and the feedback provided.
(10)
Denzel bought headphones two months ago, Solo2 Beats by Dre, for $130. He gives them to his little brother and goes online to buy another for himself but they are now $160. What is the percentage change in the headphone’s price?
Select one:
a. 23%
b. 30%
c. 21%
What are the 4 forms of utility? And explain what each one is.
Question 32
The last unit purchased of good "X" gave you marginal utility = 3 and cost
$10/unit. The last unit purchased of good "Y" gave you marginal utility =
1 and cost $4/unit. To maximize your utility you should:
do nothing since you are already maximizing.
O buy more of good "X" and less of good "Y."
O buy less of good "X" and more of good "Y."
Chapter 6 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- According to the law of diminishing marginal utility, marginal utility of a good declines as more of it is consumed in a given time period. According to this law, which of the following statement is true? a. The more I go to school, the more I want to do something else b. Since we need gasoline more than we need paper, gasoline is more valuable c. Peas give me no satisfaction, so I won't buy any d. The more coffee I drink, the more I want to drinkarrow_forwardWhich of the following choices best explains how marginal utility causes the average person to eat more food at a buffet than at an a la carte menu where you pay for each item that you want? A. Spending money on food has a very low marginal utility, so customers at a la carte restaurants will generally only buy the cheapest options (which taste worse), causing them to eat less. B. A consumer will eat until the next serving's benefit is less than its cost. At an a la carte restaurant, a consumer will stop ordering even when the marginal utility of the next serving is positive. At an all-you- can-eat buffet, the next serving always costs zero. Therefore, a consumer won't stop until the next bite provides negative marginal utility. C. People go to buffets because they want to eat more. Thus, the customers at buffets are more inclined to eat more food. Marginal utility does not play a factor in how much they eat. incorrect D. Because consumers choose their own portion sizes at a buffet,…arrow_forward5. Marie has a weekly budget of $42, which she likes to spend on magazines and pies. a. If the price of a magazine is $7 each, what is the maximum number of magazines she could buy in a week? maximum of magazine = 6 magazines a week b. If the price of a pie is $21, what is the maximum number of pies she could buy in a week? maximum of pies = 2 Pies a week c. What is Marie's opportunity cost of purchasing a pie (in terms of magazines)? d. At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? e. Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.arrow_forward
- . Jenna and Walter are on a road trip across the country. They both say that they get 25 utils from peanut butter sandwiches and 25 utils from trail mix. Knowing this, we can conclude that Jenna a. gets the same satisfaction from peanut butter sandwiches that Walter does. b. gets more satisfaction from trail mix than Walter does. c. gets more satisfaction from trail mix than from peanut butter sandwiches. d. and Walter are both indifferent between other food than peanut butter sandwiches or trail mix. e. and Walter will consume the same amount of peanut butter sandwiches and trail mix on the road trip.arrow_forwardState and explain the law of diminishing marginal utility .Why does the law operate ?arrow_forwardYou have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below. Economics Psychology Score Hours Score Hours 58 58 66 1 64 2 73 2 69 3 79 3 73 84 76 88 5 78 91 6 79 a. Use the rule for determining optimal purchases decide how many hours you should study each subject. Treat each point on an exam like 1 unit of utility and assume you equally interested in doing well in economics and psychology. You should study economics for hours and psychology for hours.arrow_forward
- According to the law of diminishing marginal utility: a. as you consume less of something, your total utility will decrease. b. as you consume less of something, your marginal utility from consuming that good will increase c. you should never consume more of something if your marginal utility is decreasing. d. If your total utility is increasing as you consume more of something, then your marginal utility must be increasing as well.arrow_forward1. Using the consumer choice theory, explain how an individual decides what combinations of different products to buy.arrow_forwardwhat is the principle of utility?arrow_forward
- If 2 tacos and 3 drinks cost $12, and 3 tacos and 2 drinks cost $13, how much does a taco cost?arrow_forwardwhat are the units of a good? what are the units of b good? what are the units of c good? the total utility of consuming five units of the b good is what utils? the total utility of consuming three units of the a good is what utils?arrow_forwardYou have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below. Economics Hours Psychology Score 58 64 Score Hours 58 66 1 1 73 69 73 76 78 79 79 84 4 5. 88 9. 91 a. Use the rule for determining optimal purchases to decide how many hours you should study each subject Treat each point on an exam like 1 unit of utility and assume you are equally interested in doing well in economics and psychology. You should study economics for 6 hours and psychology for 5 hours.arrow_forward
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