Define, explain and provide an example for each of the following concepts: a) Opportunity cost b) Marginal cost c) Marginal benefit d) The law of demand e) The law of diminishing marginal utility
Q: 29. This is the concept that explains that trends of values continues to increase but at a certain…
A: In economics, utility refers to the entire pleasure derived from the consumption of an item or…
Q: Apply marginal utility theory to the paradox of value
A: The change in the total utility when one additional unit of good is consumed is called marginal…
Q: For the utility function above, if the price of the good is $4, what is the marginal Utility per…
A: Marginal utility is the incremental/additional gain in total utility when one additional unit is…
Q: Which of the following statements is true? Total utility is the extra satisfaction from the…
A: Utility refers to the satisfaction received from consumption of a good or service. In other words,…
Q: Prove that price effect =income effect +substitution effect through graphical representation
A: Price effect is the effect of the price change on the quantity demanded of a product. The price…
Q: If the Utility function of an individual takes the form u(x, y) = (x + 2)² (y + 3)³ where U is total…
A: As given U(X,Y) = (x+2)2(y+3)3 MUx =∂U∂x
Q: Suppose the unit price of a good rises. Identify how the income effect and the substitution effect…
A: Giffen Goods: the goods whose demand increases when their prices increase, resulting in an…
Q: What is the law of diminishing marginal utility why or how is this relevant for our discussion of…
A: Marginal utility is the addition to the total utility received from consuming an additional unit of…
Q: As an individual consumes more and more of a good, each additional unit brings about less and less…
A: Marginal Utility refers to the additional satisfaction derived from consumption of an additional…
Q: If the marginal utility function of an individual takes the form U = U (x1, x2) = (x1 + 2)2 (x2 +…
A: Given, the utility function: U=U(X1, X2)=(X1+2)2(X2+3)3 i) Marginal Utilities: MUX1…
Q: Choose the best/correct answer. ___1. The curve of demand points____. A. Vertical…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first three question for you.…
Q: Which of the following statement is true? A. Marginal Utility is the additional satisfaction gained…
A: As per the law of diminishing marginal utility, the value a customer is ready and able to pay for…
Q: commodity. In other words, It is the utility derived from each additional unit. Marginal Utility…
A: Option A Marginal Utility It is the change in total utility which is attained when an additional…
Q: In the past Christmas season, the roast suckling pig market was impacted by a large number of…
A: Here, it is given that the market of roast suckling pig was affected by the buyers in the past…
Q: Define law of diminishing marginal utility concept with example
A: The basic law of consumption is 'law of diminishing marginal utility'. The marginal utility is the…
Q: Marginal utility is defined as the increment to total utility that results from the consumption of…
A: Meaning of Utility Function: The term utility function refers to the total utility for a consumer…
Q: Budget constraints provide a visual image the represents what a person can afford, given the price…
A: All individuals in the economy can purchase goods and services by the means of income that the earn…
Q: In microeconomic terms, the ability of a good or a service to satisfy wants is called and it is…
A: Microeconomics is the branch of social science that deals with issues concerning an individual,…
Q: Explain, with reasons supported by clear explanations, why merit goods are said to be under-consumed…
A: first of all merit goods are such goods which are very much necessary for the development of the…
Q: You were presented with a utility maximizing rule which states: If you always choose the item with…
A: A state of maximal satisfaction is referred to as Consumer's Equilibrium. The consumer's equilibrium…
Q: Marginal benefit A) is the total benefit from all units consumed. B) is constant as more of a good…
A: Answer to the question is as follows:
Q: Explain the statement people respond to incentives and disincentives in relation to the demand and…
A: An incentive is an item or element that motivates an economic entity to carry out or preclude an…
Q: The theory of consumer choice examines the tradeoffs inherent in decisions made by consumers. For…
A:
Q: The marginal utility of a good or service declines as one more unit is consumed because: (a)…
A: Marginal utility is that utility which are consumer get after consuming an additional unit of…
Q: It is known that the indifference curve is convex. What does this tell you about the relationship…
A: Hello, thank you for the question. Since there are multiple questions posted here, only the first…
Q: Define and explain the relationship between total utility, marginal utility, and the law of…
A: Law of diminishing marginal utility states as other factors are constant, rise in consumption will…
Q: The term “law of diminishing marginal utility” used in explaining downward sloping demand curves,…
A: Law of diminishing marginal utility explains the law of demand which states that there is an inverse…
Q: The slope of which of the following curves is a negative number? A curve that depicts total utility…
A: The answer is - 2. A curve that depicts marginal utility of an individual.
Q: Discuss it in your own understanding and then give example each of the following: Consumer and…
A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The concept of diminishing marginal utility with the help of necessary tables and graphs taking a…
A: In economics, utility refers to the entire pleasure derived from the consumption of an item or…
Q: Which of the following defines marginal utility? a. the maximum amount of satisfaction from…
A: Utility is the satisfaction a consumer derives from consuming total units of the good.
Q: Given the utility function, where U is the total utility and x and y are the commodities consumed,…
A: U(x,y) = (5x+3)2(4y+2)3
Q: explain how utility analysis leads to the law of demand.
A: Demand is a economic rule alluding to a buyer's wants for a specific item or administration. Utility…
Q: Describe in your own words :Law of Demand Demand schedule Utility Marginal Utility Diminishing…
A: Note: Since we can only answer up to three subparts, we'll answer the first three. Please resubmit…
Q: When points are positioned within the budget line, what does it mean to quantities? a. all points…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: With the help of a well labeled diagram, show and explain; How the substitution effects explain the…
A: Meaning of Law Of Demand: The term law of demand, with other factors being stable, states that;…
Q: This curve demonstrates the Law of Increasing Opportunity Cost because (select all that apply) The…
A: PPC curve shows the combinations of two goods which produces the goods at given resources.
Q: The marginal utility of a good or service declines as one more unit is consumed because: (a)…
A: The law of diminishing marginal / minimal utility indicates that as an individual gets even more a…
Q: The slope of the budget constraint is all of the following except …........
A: A budget constraint is faced by an individual and represents the different possible combinations of…
Q: Discuss the theory of diminishing marginal utility and give an example illustrating the concepts and…
A: What Is Diminishing Marginal Utility? The Law Of Diminishing Marginal Utility can be defined as the…
Q: Explain through the optimal choice of a person how their individual demand function arises. Use an…
A: Demand Demand is the amount of a commodity that consumers are willing to purchase at various…
Q: Concept of Marginal Utility was introduced by ___________
A: Marginal utility refers to the additional utility or satisfaction derived by the consumption of one…
Q: As a person receives more of a good, the _______________ from each additional unit of the good…
A: Wants satisfying power of commodity called utility , here we choose the correct option and explain…
Q: Consumers will divide their income among all goods so that: the ratio of marginal utility to…
A: Answer: A consumer maximizes its utility where the ratios of marginal utility to the price of the…
Q: Macaroni and cheese are complements, when the price of macaroni goes up, the demand curve for…
A: Two goods are complements when they are consumed together.
Q: Each point on the demand curve reflectsA) the highest price consumers are willing and able to pay…
A: Demand is the willingness and ability of consumers for consuming and buying goods and services at…
Q: Why must a budget constraint have a negative slope? Income and quantity demanded are inversely…
A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…
Q: explain the Constructing Utility from Demand in microeconomics
A: The following concepts in relation to Microeconomics is explained as follows:
Step by step
Solved in 2 steps
- What is the definition of marginal utility? A. The average utility from consuming a good or service multiplied by the number of units of that good or service consumed. B. Utility measured in utils. C. The utility from consuming a good or service divided by the number of units of that good or service consumed. D. The change in utility from consuming an additional unit of a good or service. E. The enjoyment or satisfaction people receive from consuming goods and services.The price of good x, px , is £1 and the price of y, py , is £1 and the budget is £100. The utility function for the two goods has strictly decreasing marginal rate of substitution. (a) Explain the meaning of strictly decreasing marginal rate of substitution in economic terms. Explain the opportunity cost of good x in economic terms. Calculate the opportunity cost of good x. (b) Use a graph where good x is on the horizontal axis and good y is on the vertical axis and draw the optimal solution to the utility maximisation problem subject to the budget constraint. Show the indifference curve that provides the optimal solution. What condition must be satisfied in this optimum? Interpret this condition economically in two different ways. Explain and sketch what could happen if the marginal rates of substitution are not strictly decreasing. Interpret.Explain the statement people respond to incentives and disincentives in relation to the demand and supplu curve for good x
- Which of the following defines marginal utility? a. the maximum amount of satisfaction from consuming a product b. the change in total utility divided by the price of a product c. the total satisfaction received from consuming as much of the product that is available for consumption d. the additional satisfaction received from consuming one more unit of a productIn many cases, it is reasonable to refer to the ________________ as the price Group of answer choices budget constraint sunk cost opportunity cost marginal utilityThe slope of the budget constraint is all of the following except …........ a) the relative price of two goods. b) the rate at which a consumer can afford to trade one good for another. c) constant. d) the marginal rate of substitution.
- People who misunderstand the optimal purchase rule argue that if a consumer buys so much of a good that it's price is equal to marginal utility, she could not be behaving optimally. Rather, they sat, she would be better of quitting while she was ahead, or buying a quantity such that marginal utility is much greater than the price. What's wrong with this argument? Answer with a graphIt is known that the indifference curve is convex. What does this tell you about the relationship between the goods? Using examples, does an increase in income affect a consumer’s budget line? Does it impact their total utility. Assuming the Petroleum Company of Barbados did not issue a directive for an increase in supply and a decrease in demand, explain the problem that would exist in the economy and how would this be corrected over time. Evaluate the view that the main goal of firms will always be profit maximization. Discuss one factor EACH that you think influence demand and supply for water heaters. Provide examples.The law of diminishing marginal utility A) refers to the fall in additional satisfaction created by consumption of additional units of a good. B) refers to the idea that total utility can be negative. C) refers to the decrease in total satisfaction as more units of the good are consumed. D) all of the above.
- Which of the following statements is correct? ___ Marginal utility is the sum of total utility. ____ Total utility is the sum of marginal utilities. ____ Total utility is the product of multiplying price times marginal utility. ____ Total utility is the change in marginal utility as quantity consumed increases.Describe the concept of diminishing marginal utility while also providing an example.Apply marginal utility theory to the paradox of value
