(1)Unit of Marginal(2)Marginalproduct utility. A utility, B utility, C183936ETTT333027824621FirstSecondThirdFourthFifthSixthSeventh164206Blank 1(3)MarginalBlank 212Blank 310Blank 49Using the above utility schedule:Blank 58If the price of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these threeproducts, what combination of the three products should be purchased in order to maximize utility?7Blank 1 units of the A good.Blank 2 units of the B good.Blank 3 units of the C good.5The total utility of consuming five units of the B good is Blank 4 utils.3The total utility of consuming three untis of the A good is Blank 5 utils.Add your answerAdd your answerAdd your answerAdd your answerAdd your answer

The marginal utility is the additional utility attained from buying an extra unit of the good. It…

Blank 1 units of the A good. Blank 2 units of the B good. Blank 3 units of the C good. The total utility of consuming five units of the B good is Blank 4 utils. The total utility of consuming three untis of the A good is Blank 5 utils.

Blank 1 units of the A good. Blank 2 units of the B good. Blank 3 units of the C good. The total utility of consuming five units of the B good is Blank 4 utils. The total utility of consuming three untis of the A good is Blank 5 utils.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter21: Demand: Consumer Choic

Section: Chapter Questions

Problem 1E

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Question

(1)
Unit of Marginal
(2)
Marginal
product utility. A utility, B utility, C
18
39
36
ETTT
33
30
27
8
24
6
21
First
Second
Third
Fourth
Fifth
Sixth
Seventh
164206
Blank 1
(3)
Marginal
Blank 2
12
Blank 3
10
Blank 4
9
Using the above utility schedule:
Blank 5
8
If the price of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three
products, what combination of the three products should be purchased in order to maximize utility?
7
Blank 1 units of the A good.
Blank 2 units of the B good.
Blank 3 units of the C good.
5
The total utility of consuming five units of the B good is Blank 4 utils.
3
The total utility of consuming three untis of the A good is Blank 5 utils.
Add your answer
Add your answer
Add your answer
Add your answer
Add your answer

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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.
Is it possible for total utility to increase while marginal utility diminishes? Explain.
Would you expect total utility to rise or fall with additional consumption of a good? Why?
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.
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
The rules of politics are not always the same as the rules of economics. In discussions of setting budgets for government agencies, there is a strategy called closing the Washington Monument. When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is So misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with tile highest marginal utility or line lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or line lowest marginal utility?