If the price of A is $2, the price of B is $3, and the price of C is $1, how much of each does Daniel purchase in equilibrium? b. If the price of A rises to $4 while other prices and Daniel’s budget remain unchanged, how much of each does he purchase in equilibrium? c. Using the information from parts (a) and (b), draw the demand curve for good A. Be sure to indicate the price and quantity demanded for each point on the curve.
The
budget of $24 per week among three goods. Use the following
table of marginal utilities for good A, good B, and good C to
answer the questions:
QA MUA QB MUB QC MUC
1 50 1 75 1 25
2 40 2 60 2 20
3 30 3 40 3 15
4 20 4 30 4 10
5 15 5 20 5 7.5
a. If the price of A is $2, the price of B is $3, and the price
of C is $1, how much of each does Daniel purchase in
equilibrium?
b. If the price of A rises to $4 while other prices and Daniel’s
budget remain unchanged, how much of each does he purchase
in equilibrium?
c. Using the information from parts (a) and (b), draw the demand
curve for good A. Be sure to indicate the price and
quantity demanded for each point on the curve.
15.
slopes downward and that consumers buy 500 shirts per year
when the price is $30 and 1,000 shirts per year when the price
is $25.
a. Compared to the prices of $30 and $25, what can you say
about the marginal valuation that consumers place on the
300th shirt, the 700th shirt, and the 1,200th shirt they
might buy each year?
b. With diminishing marginal utility, are consumers deriving
any consumer surplus if the price is $25 per shirt?
Explain.
c. Use a market demand curve to illustrate the change in consumer
surplus if the price drops from
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