Suppose that the price of a bag is $50 and the price of a calculator increases from $25 to $50 and Susan's budget is $200. Bundle of bags and calculators Susan can purchase Bags Calculators A 4 B 1 3 2 2 D 3 E 4 Refer to a table above. Bundle maximizes Susan's total utility, which is

Suppose that the price of a bag is $50 and the price of a calculator increases from $25 to $50 and Susan's budget is $200. Bundle of bags and calculators Susan can purchase Bags Calculators A 4 B 1 3 2 2 D 3 E 4 Refer to a table above. Bundle maximizes Susan's total utility, which is

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 1.3P

See similar textbooks

Similar questions

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.
Marie has a weekly budget of $2400, which she likes to spend on magazines and pies. If the price of one magazine is $40, what is the maximum number of magazines she can buy in a week? If the price of a pie is $120, what is the maximum number of pies she can buy in a week? Compute and show Marie’s budget schedule for pies and magazines. Draw Marie’s budget line with pies on the horizontal axis and magazines on the vertical axis.
Jane has a budget of $120 to spend at the mall. Her two favorite items are bags (Product X) which cost $35 and shoes (Product Y) which cost $40. In the schedule below you can see the marginal utility for each of her favorite items. Which combination would maximize Jane’s utility? HINT: Use utility maximizing formula, MU1/P1 = MU2/P2 Product X Product Y Quantity MUx Quantity MUy 1 140 1 220 2 105 2 160 3 70 3 120 4 35 4 80 5 0 5 10
Ernie likes energy bars and smoothies. The table below shows his utility from energy bars and smoothies. Quantity of smoothies Utility from smoothies Quantity of energy bars Utility from energy bars 0 0 0 0 1 32 2 28 2 60 4 52 3 84 6 72 4 104 8 88 5 120 10 100 The price of an energy bar is $2, the price of a smoothie is $4, and Ernie has $20 to spend. Which consumption bundles of energy bars and soothies can Ernie consume if he spends all his money? Illustrate his budget line with a diagram, putting smoothies on the horizontal axis and energy bars on the vertical axis. Calculate the marginal utility of each energy bar and the marginal utility of each smoothie. Then calculate the marginal utility per dollar spend on energy bars and the marginal utility per dollar spent on smoothies. What is Ernie’s utility maximizing bundle of energy bars and smoothies?
Jane has a budget of $200 to spend at the mall. Her two favorite items are bags (Product X) which cost $35 and shoes (Product Y) which cost $40. In the schedule below you can see the marginal utility for each of her favorite items. Which combination would maximize Jane’s utility? HINT: Use utility maximizing formula, MU1/P1 = MU2/P2 Product X Product Y Quantity MUx Quantity MUy 1 140 1 220 2 105 2 160 3 70 3 120 4 35 4 80 5 0 5 10 Group of answer choices 2 bags and 3 pairs of shoes 3 bags and 2 pairs of shoes 5 bags and 0 pair of shoes
#11. Timothy is trying to figure out what combination of bags of peanuts and bags of popcorn he should buy with his $15 budget. The price of peanuts is currently $5 per bag and the price of popcorn is currently $2 per bag. If Timothy’s marginal utility from consuming his third bag of peanuts is 15 utils and his marginal utility from consuming his second bag of popcorn is 6 utils, Timothy should a. consume more bags of popcorn. b. consume more bags of peanuts. c. not change his consumption. d. consume fewer bags of peanuts. e. consume fewer bags of popcorn.
As organic vegetables increase in popularity, Marcy finds herself eating more and more organic kale. Use the table to answer the two questions. Units of organic kale consumed by Marcy Total utility of the units consumed Marginal utility of each additional unit consumed 1 10 – 2 18 8 3 – 6 4 28 4 5 30 – 6 28 −2 What is the total utility that Marcy obtains from consuming three units of organic kale? total utility: What is Marcy's marginal utility for the fifth unit of organic kale? marginal utility:
Timothy is trying to achieve the optimum combination of bags of peanuts and bags of popcorn he should buy with his $20 budget. The price of peanuts is $5 per bag and the price of popcorn is $4 per bag. If Timothy’s marginal utility from consuming his last bag of peanuts is 20 utils and his marginal utility from consuming his last bag of popcorn is 12 utils, Timothy should? A. consume more bags of popcorn and less of peanuts. B. consume more bags of peanuts and less of popcorn. C. not change his consumption. He has already achieved the consumer optimum. D. consume fewer bags of peanuts and popcorn. E. consume more bags of popcorn and peanuts. Please type out the correct answer ASAP within 40 50 minutes, with proper explanation of the each option given. Will give upvote only for the correct answer.thank you.
Quanity Utility from Video Games Utility from Novels Marginal Utilty Video Games Marginal Utilty Novels Marginal Utilty per Dollar Video Games Marginal Utilty per Dollar Novels 0 0 0 1 30 30 2 40 38 3 48 44 4 54 46 5 58 47 The table shows the utility that Mark gets from the consumption of video games and novels. Mark has $100 per month to spend on video games and novels. Video game cost $20 each and novels cost$20 Calculate Mark’s utility from Video game Novels Calculate the MU per dollar of Mark’s consumption choices State the optimal number of video games and the optimal number of novels that Mark will conume in a month. State how each of the following will affect the quantity of VG and N consumed by Abina An increase in the money she has to spend by $20, ceteris paribus An increase in the price of ONE of the goods, ceteris paribus
If we have money, we buy goods and services to satisfy our needs. In economics, thesatisfaction that we get from the consumption of goods and services is called utility. Usea utility graph to explain what happen to the utility when you keep on increasing thenumber of units consumed. Also explain what happens to the utility when you keep onincreasing the number of units consumed. Also explain what happens to the additionalutility (i.e. additional satisfaction) when you increase your consumption by one unit
Pam has a monthly budget of £120 to be spent on T-shirts and trainers. She could afford to buy two T-shirts and two pairs of trainers. She could also buy eight T-shirts. In each case, she would be spending her entire monthly allowance. Calculate the price of a T-shirt and the price of a pair of trainers. Write down Pam’s budget equation and draw the corresponding budget line. Mark the two consumption bundles mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. Discuss how Pam’s budget set would change if the price of a T-shirt doubles. Show the relevant changes graphically. How should Pam’s income change so that she could still afford to buy two T-shirts and two pairs of trainers? Discuss how Pam’s budget constraint would change if the government imposed a tax of £3 per each pair of trainers.
Anthony’s Budget Line Anthony has already committed most of his income to his monthly living expenses and saving a few dollars each month. Having made these decisions, Anthony has a remaining budget of $15 a week, which he spends on two goods: coffee and magazines. The price of a cup of coffee is $2.50 and the price of a magazine is $5. 1. Construct a table showing the alternative combinations of the two goods that Anthony might purchase in a given week. 2. Use the data in your table to graph Anthony’s budget line. 3. What is the opportunity cost of each cup of coffee? What is the opportunity cost of each magazine? 4. Based on this information, do we know how many cups of coffee or magazines Anthony should buy each week? Why or why not? 5. Anthony decides he wants to upgrades to the $5 cup of coffee- the larger cup with extra flavoring! Using a graph, show how this will change Anthony’s budget line. (Note: This is most easily demonstrated by putting both budget lines on the…