Maria can purchase shirts for $22.00 each. She considers the benefit of one shirt to be $40.00, but with each additional shirt she purchases the benefit decreases by $5. According to the Principle of Optimization at the Margin, Maria will purchase... shirts. (Enter your response as a whole number.)
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Maria can purchase shirts for $22.00 each. She considers the benefit of one shirt to be $40.00, but with each additional shirt she purchases the benefit decreases by $5.
According to the Principle of Optimization at the Margin, Maria will purchase... shirts.
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- Evaluate the one specific law which states that the marginal utility of a good orservice declines as more of the good or service is consumed in a specific timeperiod.Martha spends 5 hours of free time exercising and playing music per day. The table below represents the level of utility she receives from the various combinations of exercise and music activities. For instance, if she only plays music, her total utility from exercise will be 0, and the utility from music will be 50. If she exercises for 1 hour, she will receive a level of utility of 25. Utility is measured in ‘utils’; those numbers are arbitrary and designed to quantify the benefits received from various actions. Utility for Exercise Utility from Music 0 utils from 0 hours of exercise 50 utils from 5 hours of music 25 utils for 1 hours of exercise 45 utils from 4 hours of music 40 35 45 20 50 0 Marginal analysis will help Martha in her decision making regarding how to spend her free time because ... All answers are correct. She will realize which activity is more important to her. She will be able to find the combination of music and exercise which gives…Another instance when people are likely not to spend a dime (or a minute) on an item is when they have a dislike for mixing the item with other items available. In this case, we say the consumer has ‘non-convex preferences’ and indifference curves are bowed out from the origin. In plain language, the consumer has a preference for binging. We often feel this way towards our favorite social media app. Consider a kid who has four hours a day to spend on social media. They enjoy spending time on Snapchat (x) or spending time on Twitter (y). a) Write the kid’s time constraint and illustrate it in a graph where you measure time spent on Snapchat along the horizontal axis and time spent on Twitter along the vertical axis. This kid’s utility from time spent on Snapchat and time spent on Twitter is U(x,y) = 4x2+ y2. b) In your graph, draw a couple of the kid’s indifference curves. Notice how the kid’s |MRSY,X| increases along each curve as he spends more time on Snapchat and less time on…
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- Suppose a consumer has a budget of $200 to spend on two goods, X and Y, whose prices are $20 and $10, respectively. If the consumer is observed to buy 5 units of X and 10 units of Y, where the respective Marginal Utilities of X and Y are, 50 and 40 utils, is the consumer in equilibrium? Explain why or why not. If the consumer is not in equilibrium under conditions in d), suggest another combination that would possibly achieve equilibrium. Explain your answer.You were presented with a utility maximizing rule which states: If you always choose the item with the greatest marginal utility per dollar spent, when your budget is exhausted, the utility maximizing choice should occur where the marginal utility per dollar spent is the same for both goods. That rule is expressed as follows: Group of answer choices (The marginal utility associated with good 1 / the price of good 2) = (the marginal utility associated with good 2 / the price of good 1) % change in price / % change in quantity (The marginal utility associated with good 1 / the price of good 1) = (the marginal utility associated with good 2 / the price of good 2) The marginal utility per dollar of good 1 > the marginal utility per dollar of good 2.I am unsure the direction the utility functions would go in , with this specific scenario
