3. Carlo budgets $9 per week for his morning coffee with milk. He likes it only if it is prepared with 4 parts coffee, 1 part milk. Coffee costs $1 per unit, milk $0.50 per unit. (a) How much coffee and how much milk will Boris buy per week? (b) How will your answers change if the price of cof- fee rises to $3.25 per unit? Show your answers graphically.

3. Carlo budgets $9 per week for his morning coffee with milk. He likes it only if it is prepared with 4 parts coffee, 1 part milk. Coffee costs $1 per unit, milk $0.50 per unit. (a) How much coffee and how much milk will Boris buy per week? (b) How will your answers change if the price of cof- fee rises to $3.25 per unit? Show your answers graphically.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 2SCQ: Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to...

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1-Which of the following provides a higher marginal utility, a diamond or a pint of water? A dimond A point of water They prodive about the same marginal utility 2- Unit of Apples MU of Apple Unit of Oranges MU of Oranges 1st 4 1st 9 2nd 3 2nd 3 3rd 1 3rd 2 4th 0 4th 0 Suppose the price of an apple is $2, and the price of an orange if $3. You have a budget $10 for these two items. What would you put in your basket first? an Apple an Orange You are indifferent between putting an apple or an orange in your basket. We do not have enough information to answer this question.
True or False explain 2. A consumer’s budget line is kinked towards the origin (i.e., the kink is pointing towards the origin) if this consumer faces a lower price per unit of x as more x is consumed.
a)Which gives you greater total utility: 14 gallons of water per day or 22 gallons per day? Why? b). At which level do you get greater marginal utility: 14 gallons per day or 22 gallons per day? Why?
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either callher on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasolinemoney. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses ahandy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values inTable 6.6, figure out the points on Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch)and identify his utility-maximizing point
Suppose Olivia has an income of $800/week for which she can use to consume two goods: entertainment (E) and other (O). Furthermore, suppose the price per unit of entertainment is $40 and the price per unit of other is $25. Can Olivia afford the following bundle: 10 units of entertainment and 15 units of other? Question 42 options: a Yes b No
image for question a. If she can visit only one of the stores, which one would she go and what would be her optimal bundle there? Could she afford this very bundle at the other store? (b) If she can freely visit both stores, (buying each commodity from the store where it is cheaper !!) what would be her optimal bundle? What would she buy from each store? (c)Back to (a), how much money would she willing to give up (out of her $720 budget) for the ability to visit both stores rather than only one store? (HINT: After giving up that money, she is left with less money with which optimizing utility with the option of visiting both stores -buying each commodity from the cheaper store- she is able to achieve the same level of utility in the scenario with the original uncut budget but having to choose only one of the stores to shop at)
7. The best alternative foregone for any choice is known as the associated cost consumer's marginal utility resource input cost explicit cost opportunity cost 9. 9. Below is the total benefit Kenneth estimates he would get for jars of chocolate-flavored hazelnut butter. Jars Total Benefit (dollars) 1 5 2 9 3 12 4 14 5 15 6 14 7 10 What is Kenneth's optimal quantity consumed if the price of each jar is $4? 1 2 4 5 7
1 explain the role of ceteris paribus in economic analysis
Ronald is an Economics students who likes to spend his leisure time of sixty hours a month doingone of two activities: watching movies at Dendy Cinemas Newtown (x), and indoor-climbing(y). A trip to the movies takes 3 hours, and each visit to the climbing gym lasts 5 hours.Further, suppose that Ronald has a fixed monthly monetary budget to spend on leisure activities. He currently exhausts this entire budget by watching two movies and visiting the climbinggym fifteen times. With this monthly budget, he would also have been able to afford exactlyseven movies and six visits to the climbing gym.Assume that both goods are perfectly divisible.(b) Show, using algebra, that Ronald’s two budget lines intersect at the bundle (x, y) =(5.5, 8.7).
Please answer parts c and d 1. To make sure he has enough energy for the teaching, Ernie spares $60 every week tospend on Blue Bull and Gigantic energy drinks. A can of Blue Bull costs $2, and a canof Gigantic costs $3. Assume that fractions of a can are allowed.(a) Draw Ernie’s budget line, measuring Blue Bull on the horizontal axis and Giganticon the vertical axis.(b) How many cans of Gigantic can Ernie afford if he buys 15 cans of Blue Bull?(c) What is the maximum number of cans of Blue Bull Ernie can afford?(d) What is the slope of the budget line? Be sure to include the sign. Explain in wordswhat this slope measures.(e) Denote the number of cans of Blue Bull by qb and that of Gigantic by qg. Writedown an equation capturing Ernie’s budget constraint. How would the equation fora budget line be different?
1. Suppose that on the island, the currency is shell beads. The going price for coconuts is 2.4 beads and that for fish is 1 bead. You earn 20 beads per period from your job as a harvester. Given the data in the table, your equilibrium or maximum satisfaction coconut-fish combination will be ____? coconuts and ____? fish. Explain why this will be the chosen combination. 2. Your total utility from the coconut-fish combination is ____?
(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%