PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Chapter 16, Problem 6SP
To determine
Calculate the
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Describe the point at which a consumer maximizes utility.
Diminishing Marginal Utility.
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Discuss an instance where you have experienced this.
Do consumers continue to purchase something even though its marginal utility is decreasing? Why or why not?
If this consumer has $13.00 to spend on cans of beer and slices of pizza in any given week, then what is the optimal combination of beer and pizza for the consumer to buy to maximize utility?
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- If at a quantity consumed of 1 unit, total utility equals 25 and marginal utility equals 25, and at a quantity consumed of 2 units, total utility is unknown and marginal utility is 20, and at a quantity consumed of 3 units, total utility is 57 and marginal utility is unknown, what is marginal utility of the third unit?arrow_forwardsolve both the questions in the image provided.arrow_forwardGive a real-life example (from your daily life) that illustrates total utility rising as marginal utility declines.arrow_forward
- Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6. Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint?arrow_forwardSuppose it is “All You Can Eat” Night at your favorite restaurant. Once you’ve paid $69.95 for your meal, how do you determine how many helpings to consume? Should you continue eating until your food consumption has yielded $69.95 worth of satisfaction? What happens to the marginal utility from successive helpings as consumption increases?arrow_forwardAria consumes only two goods, food and clothing. The marginal utility of the last dollar she spends on food is 12, and the marginal utility of the last dollar she spends on clothing is 9. The price of food is $1.20/unit, and the price of clothing is $0.90/unit. Is Aria maximizing her utility?arrow_forward
- Refer to the table below. If the subscription price for a sports app is $2 per week, the subscription price of a game app is $1 per week, and a student has $9 per week to spend, what quantities will she purchase at a consumer optimum? Quantity of Sports Apps per week Marginal Utility (utils) Quantity of Game Apps per Week Marginal Utility (utils) 1 1,200 1 1,700 2 1,000 2 1,400 3 800 3 1,100 4 600 4 800 5 400 5 500 6 100 6 200arrow_forwardAt a garage sale, Dominique purchases a sewing machine for $30 when she was willing to pay $55. If the sewing machine costs $200 new, Dominique's consumer surplus would be Select one: A. $120. В. $25. C. $170. O D. $0. OE. $145.arrow_forwardIf marginal utility is less than the price, the consumer willarrow_forward
- Ari intends to purchase a new car and has narrowed it down to a Dodge Ram truck or a Toyota Camry. A Dodge Ram truck costs $55000 while a Toyota Camry costs $20000. The utility that Ari will get from Dodge Ram truck is 12500 while Toyota Camry will generate a utility of 2500. Note: A purchase generating utility tells us the marginal utility of the good. What is the Marginal Utility per Dollar for Dodge Ram truck? What is the Marginal Utility per Dollar for Toyota Camry? Will Ari be better off buying a Dodge Ram truck or a Toyota Camry? ODodge Ram truck OToyota Camry Aarrow_forwardHow many drink(s) and Big Mac(s) should you purchase to reach consumer optimum?arrow_forwardRick eats only french fries and burgers at his office cafeteria. His weekly lunch budget is $48. Each burger costs $6 and each order of fries costs $3. When deciding how much of each good to buy, Rick knows that 2 burgers and 4 orders of french fries will give him a utility of 8. At his utility-maximizing point, Rick's utility is:arrow_forward
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