b. True or False. "A rational consumer will purchase only 1 unit of the product represented by these data, because that amount maximizes marginal utility." O False, because rational consumers maximize total utility. False, because marginal utility is constant after consuming the first unit. True, because rational consumers maximize marginal utility. O True, because marginal utility falls after consuming the first unit. c. True or False. "It is possible that a rational consumer will not purchase any units of the product represented by these data." O True, because this product's price could be high relative to the first unit's marginal utility. O False, because this product's price could be low relative to the first unit's total utility. O True, because this product's price could be high relative to the first unit's total utility. O False, because this product's price could be low relative to the first unit's marginal utility.
b. True or False. "A rational consumer will purchase only 1 unit of the product represented by these data, because that amount maximizes marginal utility." O False, because rational consumers maximize total utility. False, because marginal utility is constant after consuming the first unit. True, because rational consumers maximize marginal utility. O True, because marginal utility falls after consuming the first unit. c. True or False. "It is possible that a rational consumer will not purchase any units of the product represented by these data." O True, because this product's price could be high relative to the first unit's marginal utility. O False, because this product's price could be low relative to the first unit's total utility. O True, because this product's price could be high relative to the first unit's total utility. O False, because this product's price could be low relative to the first unit's marginal utility.
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.3P
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Transcribed Image Text:b. True or False. “A rational consumer will purchase only 1 unit of the product represented by these data, because that amount
maximizes marginal utility."
False, because rational consumers maximize total utility.
O False, because marginal utility is constant after consuming the first unit.
O True, because rational consumers maximize marginal utility.
O True, because marginal utility falls after consuming the first unit.
c. True or False. "It is possible that a rational consumer will not purchase any units of the product represented by these data."
True, because this product's price could be high relative to the first unit's marginal utility.
False, because this product's price could be low relative to the first unit's total utility.
O True, because this product's price could be high relative to the first unit's total utility.
O False, because this product's price could be low relative to the first unit's marginal utility.
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Transcribed Image Text:Complete the following table and answer the questions below:
Instructions: Enter your answers as a whole number.
Units
Consumed
0
1
2
3
4
5
6
Total
Utility
0
10
4
25
30
34
Marginal
Utility
10
8
3
a. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?
A constant rate, because marginal utility is increasing.
A decreasing rate, because marginal utility is declining.
O An increasing rate, because marginal utility is declining.
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