Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 7.1, Problem 1QQ
To determine
Marginal utility .
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Students have asked these similar questions
Which of the following defines marginal utility?
a.
the maximum amount of satisfaction from consuming a product
b.
the change in total utility divided by the price of a product
c.
the total satisfaction received from consuming as much of the product that is available for consumption
d.
the additional satisfaction received from consuming one more unit of a product
What is the definition of marginal utility?
A.
The average utility from consuming a good or service multiplied by the number of units of that good or service consumed.
B.
Utility measured in utils.
C.
The utility from consuming a good or service divided by the number of units of that good or service consumed.
D.
The change in utility from consuming an additional unit of a good or service.
E.
The enjoyment or satisfaction people receive from consuming goods and services.
What happens to the original budget line if the price of good ? falls to 4$? (i.e., Will there be a change in the slope and/or intercepts of the original budget line? If yes, what are those changes?). Interpret economically how the change in the price of good ? affects the consumption decision of the consumer.
Chapter 7 Solutions
Microeconomics
Ch. 7.1 - Prob. 1QQCh. 7.1 - Prob. 2QQCh. 7.1 - Prob. 3QQCh. 7.1 - Prob. 4QQCh. 7.A - Prob. 1ADQCh. 7.A - Prob. 2ADQCh. 7.A - Prob. 3ADQCh. 7.A - Prob. 1ARQCh. 7.A - Prob. 2ARQCh. 7.A - Prob. 1AP
Ch. 7.A - Prob. 2APCh. 7.A - Prob. 3APCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7P
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- K A budget line is a line that describes limits to consumption possibilities and that depends on a consumer's OA. demand; prices B. demand; supply C. budget; costs D. budget; prices and of goods and services.arrow_forwardThe marginal utility derived from the consumption of extra unit of commodity. True/Falsearrow_forward7) The law of diminishing marginal utility(a) refers to the decrease in total satisfaction as more units of the good areconsumed.(b) refers to the idea that total utility can be negative.(c) refers to the fall in additional satisfaction created by consumption of more andmore units of a good.(d) All of the above.arrow_forward
- Utility maximizing, substitution effect I have A-C answered, just need parts D-G, graph is includedarrow_forwardExhibit 6-7 Marginal utility for sandwiches and sodas Quantity Sandwiches Sodas 1 10 5 2 8 4 3 6 3 4 3 1 5 −1 0 Refer to Exhibit 6-7. Diminishing marginal utility for sandwiches sets in after the ____ sandwich. a. second b. fourth c. firstarrow_forwardNo written by hand solution Suppose pasta salad is a normal good. What will happen if the price of pasta (a major ingredient in pasta salad) increases and income also increases?arrow_forward
- 1. A consumer consumes two kinds of goods, namely X and Y. The total satisfaction (TU) obtained in consuming both kinds of goods is shown in the equation; (Unit of money in thousands of dollars).TU = 10X + 24Y - 0.5X2 - 0.5Y2TU is the total satisfaction in consuming goods X and YX is the number of items X consumedY is the number of items Y consumedThe price of item X is known to be $ 2, the price of item Y is $ 6 and the budget available to buy item X and item Y is $ 44.Question:a. Determine how many goods X and the number of goods Y must be consumed so that the consumer gets maximum total satisfaction. Determine the total satisfaction that can be obtained from consuming item X and item Y.b. If the price of item X drops from $ 2 to $ 1, determine the quantity of item X and the number of items Y must consume to obtain maximum total satisfaction. Determine the total satisfaction that can be obtained from the consumption of item X and item Y. 2. A producer has a total cost function: TC =…arrow_forwardA consumer’s budget set for two goods (X and Y) is 500 ≥ 4X + 5Y.a. The budget set is illustrated below. What are the values of A and B? The horizontal axis is labeled Good X. The vertical axis is labeled Good Y. A line begins at a point on the vertical axis goes down to the right and ends at a point on the horizontal axis. A = B = b. Does the budget set change if the prices of both goods double and the consumer’s income also doubles? multiple choice Yes, it rotates clockwise Yes, it shifts out from the origin Yes, it shifts in toward the origin No, it does not change c. Given the equation for the budget set, what are the prices of the two goods?Good X: $ Good Y: $ What is the consumer’s income? $arrow_forwardPractice Question 3: Joe's income is $1000, the price of pizza (P) is $10 per unit, and the price of burger (B) is $8. Which of the following represents his budget constraint? Group of answer choices 1 500+4B=5P 2 5P+4B=500 3 100=P+1.2B 4 1000=8P+10Barrow_forward
- Course: Microeconomic - Consumer Theory Model, explain and analyze in detail, based on consumer theory, how an individual responds to a change in the price of a good in his or her basket (income and substitution effect).a) Considering 2 goods (potatoes and meat) explain how they are related. Analyze the total effect of a decrease in the price of the first good.b) Analyze the income and substitution effect if potatoes are an inferior good.Attach the graphs in each case.arrow_forwardQuestion 4 Given the following budget line ???+???=? And that the slope of the budget line depends only on relative prices, show what happens to the budget line when: (a) ?? rises (b) ? reduces (c) Both ?? and ?? rise by the same proportion (d) a consumer is given an in-kind transfer of 40 units of good ? (e) the government imposes a quantity tax (t) on good ?arrow_forwardPROBLEM (5) A consumer with I dollars budget has the utility u(x,y) = x(y+1) over amounts of cake (x) and ice cream (y) she consumes. The prices are px , py respectively. (a) Derive her demand for cake (x), as a function of prices px , py and her budget I.(b) Looking at the demand function in (a), is cake a normal good or an inferior good? Are cake and ice cream complements or substitutes?(c) Calculate the (i) (own) price, (ii) income, (iii) cross- price elasticity of demand for cake at the point whereI = 80, px =10, py = 20..arrow_forward
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