The table below shows Martha’s total utility from burgers and pasta. Suppose that the price of a burger is $4, the price of pasta is $8 a dish, and Martha has $24 a week to spend. Quantity of Burger per week Total utility for Burger MU MU/P Quantity of Dishes Pasta per week Total utility for Pasta MU MU/P 0 0 0 0 1 10 1 20 2 18 2 36 3 25 3 48 4 31 4 56 5 36 5 60 6 40 6 62 a- Conclude whether or not we follow the law of diminishing MU. b- What is optimal combination of Burger and Pasta?
The table below shows Martha’s total utility from burgers and pasta. Suppose that the price of a burger is $4, the price of pasta is $8 a dish, and Martha has $24 a week to spend. Quantity of Burger per week Total utility for Burger MU MU/P Quantity of Dishes Pasta per week Total utility for Pasta MU MU/P 0 0 0 0 1 10 1 20 2 18 2 36 3 25 3 48 4 31 4 56 5 36 5 60 6 40 6 62 a- Conclude whether or not we follow the law of diminishing MU. b- What is optimal combination of Burger and Pasta?
Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics
Section: Chapter Questions
Problem 3WNG
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Question
The table below shows Martha’s total utility from burgers and pasta. Suppose that the
Quantity of Burger per week |
Total utility for Burger |
MU |
MU/P |
Quantity of Dishes Pasta per week |
Total utility for Pasta |
MU |
MU/P |
0 |
0 |
|
|
0 |
0 |
|
|
1 |
10 |
|
|
1 |
20 |
|
|
2 |
18 |
|
|
2 |
36 |
|
|
3 |
25 |
|
|
3 |
48 |
|
|
4 |
31 |
|
|
4 |
56 |
|
|
5 |
36 |
|
|
5 |
60 |
|
|
6 |
40 |
|
|
6 |
62 |
|
|
a- Conclude whether or not we follow the law of diminishing MU.
b- What is optimal combination of Burger and Pasta?
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