Frida loves to eat hot dogs and peanuts at the baseball park. She has budget of $21 and one bag of peanuts costs $3 while a hot dog costs $6. Using the table below, identify the total utility of hot dogs and peanuts when Frida maximizes her utility within her budget constraint. Hot dogs Total Utility Peanuts Total Utility 22 16 31 45 1 2 3 4 5 6 7 43 62 Select one: O 81 97 111 119 1 2 3 4 5 6 7 a. 88 total utility units b. 92 total utility units c. 74 total utility units d. 99 total utility units 58 70 81 92

Frida loves to eat hot dogs and peanuts at the baseball park. She has budget of $21 and one bag of peanuts costs $3 while a hot dog costs $6. Using the table below, identify the total utility of hot dogs and peanuts when Frida maximizes her utility within her budget constraint. Hot dogs Total Utility Peanuts Total Utility 22 16 31 45 1 2 3 4 5 6 7 43 62 Select one: O 81 97 111 119 1 2 3 4 5 6 7 a. 88 total utility units b. 92 total utility units c. 74 total utility units d. 99 total utility units 58 70 81 92

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 3SQP

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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.
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.
Is it possible for total utility to increase while marginal utility diminishes? Explain.
If people do not have a complete mental picture of total utility for every level of consumption, how can they find their utility-maximizing consumption choice?
Five consumers have the following marginal utility ofapples and pears:Marginal Utilityof ApplesMarginal Utilityof PearsClaire 6 12Phil 6 6Haley 6 3Alex 3 6Luke 3 12The price of an apple is $1, and the price of a pear is$2. Which, if any, of these consumers are optimizingtheir choices of fruit? For those who are not, howshould they change their spending?
The table below shows Cedric's marginal utility for soda and cookies at each quantity. What is his total utility if he consumes 6 soda and 3 cookies? Quantity of Soda Marginal Utility Quantity of Cookies Marginal Utility 1 48 1 39 2 46 2 37 3 44 3 35 4 41 4 32 5 37 5 29 6 34 6 25 7 31 7 22 8 25 8 18 9 18 9 14 10 12 10 10 11 5 11 7 Group of answer choices 379 total utility units 66 total utility units 314 total utility units
Given the following information: Quantity (units) TU1 TU2 0 0 0 1 40 20 2 60 36 3 76 45 4 86 51 5 94 53 TU(Total utility) Assume that P1 = 4 naira per unit and P2= 10 naira per unit: a. What quantities of q1 and q2 does the consumer buy at the equilibrium point b. Calculate the total utility that he derives at that point. c. Calculate the budget line or income of the consumer and this result on a graph
John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke, or does he show increasing marginal utility for Coke? Supposethat John has $3 in his pocket. If Cokes cost $1 each and John is willing to spend one of his dollars on purchasing a first can of Coke, would he spend his second dollar on a Coke, too? What about the third dollar? If John’s marginal utility for Coke keeps on increasing no matter how many Cokes he drinks, would it be fair to say that he is addicted to Coke?
4. Kay lives in a city where housing costs $1 per square foot. They have a monthly budget of$1,000, of which they decide to allocate $500 to rent a 500 sqft. apartment and spend teother $500 on consumption. A generous relative offers Kay a deal on a 400 sqft. apartmentfor only $200 per month, which they accept. What is the equivalent variation of this transferfor Kay, in dollars per month? (Select one)(a) More than $300: Kay gets utility from both consumption and the new apartment.(b) $300: That is how much more Kay can consume with the new cost of rent.(c) $250: That is how much less Kay’s old bundle would have cost at the new prices.(d) Between $0 and $250: Kay would substitute away from her old bundle at the new prices.(e) $200: That is the additional cost of Kay’s new bundle at the old prices.(f) Between $0 and $200: Kay may prefer to substitute away from her new bundle at theold prices.(g) $100: That is the differential cost of the new apartment at the old prices.(h) $0: The new…
What is the total utility at 3 units and the marginal utility when Jenna goes from consuming two units to three units pears? Quantity Marginal Utility 1 35 2 25 3 15 4 10 5 0 6 -5 Group of answer choices Total utility = 75 ; Marginal Utility = 15 Total utility = 75 ; Marginal Utility = 10 Total utility = 40 ; Marginal Utility = 15
The following table indicates Sharona’s marginal utilities from the additional consumption of goodsA and B. The first and third columns of the table show the quantities of goods A and B consumed.The second and the fourth columns show Sharona’s marginal utilities from each additional unit ofgoods A and B consumed. The price of A is $2 per unit, and the price of B is $4 per unit. IfSharona’s budget is $12, then what consumer equilibrium combinations would maximize her totalutility?Table 6.6QA MUA QB MUB1 24 1 482 22 2 443 18 3 364 12 4 24