PRIN.OF ECON.ACCESS CODE
2nd Edition
ISBN: 9780393691757
Author: Mateer
Publisher: NORTON
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Chapter 16, Problem 4QFR
To determine
To explain:
The inferences when it is said that the
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Chapter 16 Solutions
PRIN.OF ECON.ACCESS CODE
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Similar questions
- If the consumer is consuming exactly two goods, and she is always spending all of her money, can both of them be inferior goods?arrow_forwardUse the Law of Diminishing Marginal Utility to discuss why Market Demand has to have a downward slope. In other words, in order for consumers to demand a higher quantity of an item, its price must fall. Also use the Law of Diminishing Marginal Utility to explain why consumers often prefer to purchase a variety of goods and services (in other words, we are unlikely to fill a grocery cart with many units of the exact same product). Finally, use the utility optimizing condition that the ratio of Marginal Utility to Price for any good has to be the same across all goods to justify why it may be rational behavior to buy an item that is expensive compared to other items. Discuss these concepts using examples from your own experience and observations.arrow_forwardWhat is marginal utility. Tell mearrow_forward
- How do your total and marginal utility change as you stay at home watching the same TV show (not necessarily the same episode) alone all day?arrow_forwardAll goods have diminishing marginal utility, but for some goods (or activities), marginal utility falls quickly as you consume more, while for others, marginal utility falls slowly. Can you think of examples of goods that you continue to enjoy a great deal as your consumption increases? Can you think of goods for which your marginal utility decreases rapidly?arrow_forwardDefine, and then explain in your own words what the concept of Marginal Utility is:arrow_forward
- Based on the table below, what is the marginal utility from the 2nd unit? UNITS TOTAL UTILITY 1 50 2 75 3 90 4 100arrow_forwardWhat is the shape of the marginal utility curve?arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forward
- The law of diminishing marginal utility states that?arrow_forwardwhat is the principle of utility?arrow_forwardRecall the text’s definition of diminishing marginal utility: “the common pattern that each marginal unit of a good consumed provides less of an addition to utility than the previous unit.” The reason for this behavior is because of biology. Our body sends our brains a signal once too much of a good or service has been consumed. This prevents a person from literally eating until they explode. In your own experience, share two times instances where the law of diminishing marginal utility applied to you. Can you think of any time when the law of diminishing marginal utility failed for someone?arrow_forward
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