2. In the following examples, state how you would use the principle of marginal analysis (and idea ofdiminishing marginal utility) to make a decision. Make sure to include at least one marginal cost andone marginal benefit. Use at least two sentences in your response.| a. Deciding how many Krispy Kreme doughnuts to eat in one sitting.b. Deciding how many AP classes for the 2021-2022 school year.

Marginal Analysis refers to the analysis that use to assist the individuals in allocating their…

Answered: 2. In the following examples, state how…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 9P

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Similar questions

Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of 2 in gasoline money. He has a total of 10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremys consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.
Explain why individuals make Choices that are directly on the budget constraint, rather than inside the budget constraint DI outside it.
1. Suppose you earn $1500 per week and you consume only two types of goods per week- sandwiches and orange juice, which you purchase at a mini mart. Each sandwich cost $150 and an orange juice is $75 per cup. a) Construct a table showing the alternative combinations of the two products that are available. b)Plot the data in your table on a budget line. What is the slope of the budget line? What is the opportunity cost of one more cup of orange juice? And what is opportunity cost of one more sandwich? Do these opportunity cost rise, fall or remain constant as you purchase an additional unit of the product? c)Suppose the price of a cup of orange juice increased to $150. Construct a new table showing alternative combinations of sandwiches and orange juice. Construct the new budget line.
3. If the price of good 1 doubles and the price of good 2 triples, does the budget line become flatter or steeper?4. What is the definition of a numeraire good?
Hi! Why is the answer B and not C? I thought that to be able to maximize utility we had to buy more of X and less of Y in order to increase marginal utility in Y and decrease marginal utility in X to reach an equal marginal utility for both. Thank you!
1.(a) Suppose a consumer derives satisfaction from consuming hamburgers and hot dogs.How will the budget line change when the consumer is offered a "buy two, get one free" deal for hotdogs (limit one free hot dog). Please show the changed budget line on the graph given below. (b) Please explain how “Buy one get one free” is different from a half price (50% off) sale. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
8) When Marginal Utility = 0, Total Utility is A) Maximum B) Constant C) Minimum D) None of the above
Q2. You drink only Coffee or Orange juice Price of Coffee (dollars per cup) Marginal Utility of Coffee (for 1st cup) Price of Orange Juice (dollars per glass) Marginal Utility of Orange Juice (for 1st glass) $3 60 $2 50 c) If you have 1 cup of Coffee and 1 glass of Orange juice, are you in Equilibrium? Explain briefly. d) If not, how should you change your consumption of these 2 items?
Explain the cardinal and ordinal utility approach ?

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