Whether 14 gallons of water will give more utility, or 22 gallons of water will give more utility.
Explanation of Solution
There are three types of commodities, namelygoods, bads and neutrals.
"Goods" are those commodities that provide more utility when more is consumed.
"Bads" are those commodities that provide less utility with each additional unit consumed.
"Neutrals" are those commodities that provide the same utility irrespective of the number of units consumed.
If water is a good, then 14 gallons of water will provide less utility than 22 gallons of water.
If water is a bad, then 14 gallons of water will provide more utility than 22 gallons of water, because more gallons of water consumed will decrease the utility obtained.
If water is a neutral, then the utility obtained from 14 gallons of water will be equal to 22 gallons of water.
Total utility refers to the level of satisfaction that a consumer receives from the consumption of a good or service.
The total utility initially increases at an increasing rate first, then at a diminishing rate, and then it finally starts to fall after reaching its maximum point.
A consumer would be willing to purchase more of a good if the total utility is increasing.
Want to see more full solutions like this?
Chapter 5 Solutions
Microeconomics: Principles and Policy (MindTap Course List)
- a)Which gives you greater total utility: 14 gallons of water per day or 22 gallons per day? Why? b). At which level do you get greater marginal utility: 14 gallons per day or 22 gallons per day? Why?arrow_forward• Can someone else measure your utility why or why not?arrow_forwardHow should I spend my money in order to maximize my utility?”arrow_forward
- would you rather maximize your total utility or your marginal utility?arrow_forwardHow 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_forwardYour gym offers two classes at the same time:weightlifting and yoga. Both classes are includedin your membership and have space available.Your friend tells you he wants to work on hisstrength and take the weightlifting class, but youalways see him in yoga class. Which class giveshim more utility? How do you know this?arrow_forward
- Explain what the utility maximizing choice means. Discuss how you could use marginal utility to make consumer choicesarrow_forwardEconomists assume that consumers choose the best bundle of goods they can afford. True or false?arrow_forwardJeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either callher on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasolinemoney. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses ahandy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values inTable 6.6, figure out the points on Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch)and identify his utility-maximizing pointarrow_forward
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc