do you agree that we have such a diminishing marginal utility of income just like we have a diminishing marginal utility when we consume more of a good or service e.g, the marginal utility of of your 12th pair of shoes is probably zero or close to zero? second in your estimation, at what level of income will the marginal utility of income start to diminish? do you think other people will agree with you? why? finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation?

do you agree that we have such a diminishing marginal utility of income just like we have a diminishing marginal utility when we consume more of a good or service e.g, the marginal utility of of your 12th pair of shoes is probably zero or close to zero? second in your estimation, at what level of income will the marginal utility of income start to diminish? do you think other people will agree with you? why? finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 2QFR

See similar textbooks

Related questions

Q: Q1. You have Rs.10. The price of samosa is Rs.1 per unit. The price of a steak sandwich is Rs.3 The…

A: Income= Rs10 Price of 1 samosa= Rs1 Price of steak= Rs3 Utility maximization:- It refers to notion…

Q: Complete the following table and answer the questions below: a. At which rate is total utility…

A: Total utility (TU) is the sum total of all utilities which a rational consumer derives by consuming…

Q: Would you expect marginal utility torise or fall with additional consumption of a good? Why?

A: The utility is something that a consumer gains after consuming a good or a product. It is measured…

Q: Suppose Olivia has an income of $800/week for which she can use to consume two goods: entertainment…

A: Olivia's income = $800 Price of Entertainment = $40 Price of Other = $25 Budget Equation: 40E + 25O…

Q: Exercise 2: 1. The table below shows the marginal utility of good A, good B and good C for Betty.…

A: Since you have posted multiple parts question, we will solve the first three parts for you. If you…

Q: Jane's utility function is U = 4XY, where X= number of sandwiches per week and Y = number of salads…

A: Marginal utility is the additional utility gained from consuming one more unit of the good

Q: Explain why it is that as the consumer purchases more of a good, her marginal utility falls while…

A: Utility: - Utility is the satisfaction derived by any consumer by consuming a good or service.

Q: The daily total utility per quantity of consumption is shown in the figure. This shows that the…

A: The additional satisfaction a client gets from possessing one additional unit of associate item or…

Q: Unit of product (1) Marginal utility, A (2) Marginal utility, B (3) Marginal utility, C First…

A: In microeconomics, the function of U {"utility"} is described as a crucial term or concept in which…

Q: The table below shows total utility for two products. Suppose that the price for product A is $5 and…

A: Marginal utility refers to the additional units of satisfaction derived from one more additional…

Q: 23

A: It clarifies why a buyer's interest bend slants descending. Assuming the cost of decent falls, the…

Q: Mr. Abdulah enjoys Coffee (K) and Tea (T), with the utility function U (K, T) = 3K + 4T. Question: -…

A: This is a perfect substitute case, as tea and coffee both are substitutes for each other and can…

Q: Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is…

A: MUx (for Jim) = y MUy (for Jim) = xPx = $2 and Py = $4 ( as given in another subpart of…

Q: Consider a utility function u(x, y) = *y, where 0 0. %3D 1. Derive the marginal utility of x and the…

A: (1) u = (1/2)xayb Differentiate u w.r.t x to get MUx MUx = du / dx => MUx = (a/2)xa-1yb…

Q: What is the definition of marginal utility? A. The average utility from consuming a good or…

A: ANS Marginal Utility (MU) can be defined as the gain in the utility level that is achieved when the…

Q: Answer the question based on the table below showing the marginal utility schedules for product X…

A: We have given that The price of good x is $3 and the price of good Y is $2 and consumer income is…

Q: PROBLEM You are choosing between two goods, X and Y, and your MU from each is shown in the table…

A: Marginal utility is the additional fulfillment a consumer gets from having another unit of a decent.…

Q: Analyze the graph below, and answer the following; (Graph on Total Utility and Marginal Utility) TU,…

A: Utility: Utility for a consumer can simply be defined as the want-satisfying power that a good…

Q: Troy has preferences for laptops (L), and drones (D). Laptops costs $750 a unit and drones costs…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Given the data in the below table, income of $13, a price of $1 for a gallon of gasoline and $2.00…

A: Answer - "Thank you for submitting the questions.But, we are authorized to solve one question at a…

Q: How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?

A: If prices and consumer’s income will be double then there is no effect in budget constraint and it…

Q: E. Show that if Mr. Green is forced to spend a fixed amount of his income on a particular good, his…

A: Utility maximisation is the case where consumer spend their income freely to equalised the MRS =…

Q: Assume that a consumer is currently maximizing satisfaction and buying popcorn and apple pies. If…

A: A consumer consumes where the two goods marginal utility per dollar is equal.

Q: Question 15 Nadia says, "You would have to pay me L.E. 600 for me to be willing to attend that…

A: Given: Condition- " You would have to pay me L.E. 600 for me to be willing to attend that concert".

Q: Suppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is $1.50 per…

A: The ratio of the marginal utility of beef to pork can be calculated as follows:…

Q: Sketch a typical downward sloping demand curve for bagels. What must be true for Bill to purchase…

A: Optimal condition Marginal Utility = Price Bill will purchase additional bagels only when marginal…

Q: Answer the next questions on the basis of the following marginal utility (MU) data for products X…

A: Equilibrium is given by MUx/ Px = MUy /Py

Q: When do we differentiate between using the formula MU(x) = TU(x) – TU(x – 1) and Marginal Utility =…

A: Utility means satisfaction. It is derived from the consumption of goods and services. The total…

Q: QUESTION 12 The tables below represent the utility that Bill receives from consuming widgets and…

A: Since you have asked multiple questions, we will be answering the first one, if you need an answer…

Q: Suppose Olivia has an income of $800/week for which she can use to consume two goods: entertainment…

A: Budget constraint shows the different possible combination of consumption of goods and services…

Q: A consumer who has spent all of her income on clothes and food and finds that her marginal-utility…

A: Answer: A purchasing more clothes and less food

Q: How does a consumer decide what combination of products to buy using the marginal utility concept

A: The concept of marginal utility studies increase in satisfaction that a consumer gets from consuming…

Q: Samuelson maximizes his utility by spending his entire income of $29 on video 3.5 games and cards.…

A: i) At utility maximization, MUx/Px = MUy/Py He buys 2 video games and 3 cards 28/4 = 42/Py Py= 42/7=…

Q: How can else increase marginal utility and therefore the consumer demand curve?

A: marginal utility is the additional fulfillment a purchaser gets from having another unit of a decent…

Q: Define the law of diminishing marginal utility. Given an individual’s income and the prices of two…

A: The optimal amount of SG and H using Equi marginal principal can be determined as follows- The…

Q: Suppose that Jon is purchasing the optimal amounts of apples and oranges. The marginal utility of…

A: Consumer equilibrium or maximum utility can be obtained by equating the marginal utility-price ratio…

Q: Answer the following short questions: a. Suppose that a consumer’s preferences between goods x and y…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: utility.

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: ow does the law of diminishing marginal utility relate to changing income? Select one: a. The…

A: Marginal utility is the utility that is derived by consuming one extra unit of the good.

Q: Illustrate with Example: According to law of diminishing marginal utility, as you consume more and…

A: Law of diminishing marginal utility:- As per the notion, a person utilizes more amount of a product,…

Q: 44. Answer the next question(s) based on the table below showing the marginal utility schedules for…

A: Marginal Utility (MU) refers to the additional satisfaction enjoyed by consumer from consuming an…

Q: 5. Each week, Bill, Mary, and Jane select the quantity of two goods, x, and x2, that they will…

A: Total utility is the total measure of fulfillment or satisfaction that a purchaser gets through the…

Q: Sumaiya, who consumers Pepsi and pizza, gets a raise in her income from $200 to $300 Pepsi costs her…

A: For normal good, an increase in income causes a consumer to buy more of a good and with increase in…

Q: Suppose the following table reflects the total satisfaction (utility) derived from eating pizza:…

A: The utility is an important concept of the consumers’ demand theory. Marginal utility is the utility…

Q: The law of diminishing marginal utility says that as a person consumes more and more of a certain…

A: Law of Diminishing Marginal Utility indicates that gains in satisfaction become smaller as…

Q: Utility is given by U(x1; x2) = x1x2. Marginal utilities are MU1 = x2, and MU2 = x1. The price of x1…

A: Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…

Question

second in your estimation, at what level of income will the marginal utility of income start to diminish? do you think other people will agree with you? why?

finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation?

Rules by which an authority (usually a government) imposes a financial obligation on individuals or organizations within its domain. Property or transactions can be taxed. While taxes are primarily intended to fund the operation of a government, many tax laws are created to encourage or discourage certain behaviors by citizens or companies.

Expert Solution