Total utility and marginal utility .

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Problem 2. If the consumer preference can be represented by a CES function with δ = 0.5, i.e. u(x, y) = x0.5 + y0.5. Let the prices and income be (px, py, w). 1. Set up the Lagrangian expression.2. Take the first-order conditions.3. Substitute into budget constraint to derive the optimal consumption bundles.

1. A town relies on four different sources for its non-drinking water needs: dam water, reclaimed water, rain water, and desalinated water. The different sources carry different risks and costs. For instance, desalinated water is fully reliable due to abundant sea water, but it is more expensive than other options. Reclaimed water also has relatively lower risk than rain or dam water since a certain amount can be obtained, even during the dry. season, by the treatment of daily generated waste water. Using any of the four options requires an investment in that resource. The return on a particular water source is defined as the amount of water generated by the source per dollar of investment in it. The expected returns and standard deviations of those returns for the four water sources are described in the following table: Water resource Expected return St. Deviation Dam water 2.7481 0.2732 Reclaimed water 1.6005 0.0330 Rain water 0.5477 0.2865 Desalinated water 0.3277 0.0000 Higher…

1. Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

Answer 2

Question

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 6

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 7

Chapter 7, Problem 1DQ

Subpart (a):

To determine

Total utility and marginal utility.

Answer 8

Subpart (a):

Expert Solution

Explanation of Solution

The total utility can be calculated by adding up the marginal utilities and the marginal utility can be calculated by subtracting the total utility at the previous unit consumed from the total utility at the present consumption.

The total utility and the marginal utility at 1 unit consumption are 10 and the marginal utility from the 2^nd unit is 8. Thus, the total utility at the 2^nd unit can be thus calculated by adding up the marginal utilities as follows:

Total utility at 2nd unit=Marginal Utility at 1st unit+Marginal utility at 2nd unit=10+8=18

Thus, the total utility at the 2^nd unit of consumption is 18 utils.

The total utility at 2^nd unit is calculated as 18. The total utility at the 3^rd unit is given as 25. Thus, the marginal utility of the 3^rd unit can be calculated as follows:

Marginal utility of 3rd unit=Total utility of 3rd unit−Total utility of 2nd unit=25−18=7

Thus, the marginal utility of the 3^rd unit is 7 utils.

Similarly, the total utility at the 4^th unit is 30 and the 3^rd unit is 25. The marginal utility of the 4^th unit can be calculated using the same equation as follows:

Marginal utility of 4th unit=Total utility of 4th unit−Total utility of 3rd unit=30−25=5

Thus, the marginal utility of the 4^th unit is 5 utils.

The total utility at the 4^th unit is given as 30 utils. The marginal utility from the 5^th unit is given as 3. So, the total utility from the 5^th unit can be calculated by adding these two together as follows:

Total utility of 5 units=Total utility of 4 units+Marginal utility of 5th unit=30+3=33

Thus, the total utility of 5 units is 33 utils.

The total utility of 6 units is given as 34. The total utility of 5 units is calculated as 33. Thus, the marginal utility of the 6^th unit can be calculated as follows:

Marginal utility of 6th unit=Total utility of 6th unit−Total utility of 5th unit=34−33=1

Thus, the marginal utility of 6^th unit is 1 util.

Thus, the table can be filled as follows:

Units consumed	Total utility	Marginal utility
0	0	0
1	10	10
2	18	8
3	25	7
4	30	5
5	33	3
6	34	1

The marginal utility starts from 10 and it starts to decline from 10 to 1, at the end. The marginal benefit thus shows a decline. Since the total utility is the addition of marginal utilities, because of the decline in the marginal utility, the total utility increases but at a diminishing rate.

Answer 9

Subpart (a):

Expert Solution

Answer 10

Subpart (a):

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 13

Subpart (b):

To determine

Total utility and marginal utility.

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 14

Subpart (b):

To determine

Total utility and marginal utility.

Answer 15

Subpart (b):

Expert Solution

Explanation of Solution

The rational consumers in the economy try to maximize the total utility that they derive from the consumption of the goods and services. Thus, the decline in the marginal utility is not the reason which determines the quantity demanded. Thus, the individuals will try to maximize the total utility and thus, the statement is not agreeable. The marginal utility beyond the 1^st unit may be sufficiently great in terms of price. As a result, people will demand beyond the 1^st unit. Thus, the statement is not agreeable.

Answer 16

Subpart (b):

Expert Solution

Answer 17

Subpart (b):

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 20

Subpart (c):

To determine

Total utility and marginal utility.

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.

Answer 21

Subpart (c):

To determine

Total utility and marginal utility.

Answer 22

Subpart (c):

Expert Solution

Explanation of Solution

People compare the level of utility that they receive from the consumption of the goods and services with their respective prices. When the price of the commodity or service is higher than the total utility that the consumer receives from the very first unit of consumption, the rational consumer may decide not to purchase the item. Thus, the statement is agreeable.

Answer 23

Subpart (c):

Expert Solution

Answer 24

Subpart (c):

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Concept introduction:

Utility: It can be described as the benefit or the satisfaction that the consumption of a good or service provides to the consumer.

Total utility: It is the summation of all utilities derived, by the consumer, from the consumption of the individual units of a specific good or service.

Marginal utility: It is the extra satisfaction that a consumer derives from the consumption of an additional unit of the specific good or service.