Economics For Today
Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 6, Problem 3SQP
To determine

The total utility and the marginal utility derived.

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You purchased five video games at $20.00 each and eight apps from iTunes for $2.99 each. The fifth video game gave you an additional 65 utils of satisfaction, while the eighth app gave you an additional 18 utils of satisfaction. Is this your maximum utility combination of video games and iTunes apps, or can you make a change that would increase your utility even more?
When consumers have a budget, their utility is maximized by buying a combination of goods such that the marginal utility per dollar is the same for all of these goods. This is because if this were not the case, it would mean that the consumer hadn't used up their entire budget. of their insatiability. if a consumer could get higher marginal utility from one good than from others, they would want to buy more of that good, and less of others. if a consumer could get higher marginal utility from one good than from others, they would want to buy less of that good, and more of others. it guarantees them some variety.
Give a real-life example (from your daily life) that illustrates total utility rising as marginal utility declines.
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