ADDED DISCUSSION WITH QUESTIONSTOPIC: MARGINAL UTILITY567No. of Pieces Total Utility(Q)1234(TU)150225250220891011 Marginal Utility is calculated using the formula given below12 Marginal Utility(TU-TU)/(Q-Q)1314DFor 1 Piece For 2 Piece For 3d Piece(86-0)/(A6-0) -(87-86)/(A7-A6)15075(88-87)/(AS-A7)25Marginal15 Utility Formula16 Marginal Utility17For 1st Piece of the CakeMarginal Utility1 = (150-0)/(1-0) MarginalUtility1 = 150For 4th Piece(89-88)/(AS-AS)-30For 2nd Piece of the CakeMarginal Utility2=(225-150)/(2-1) MarginalUtility2 = 75For 3rd Piece of the CakeMarginal Utility3 = (250-225)/(3-2) MarginalUtility3 = 25For 4th Piece of the CakeMarginal Utility4 = (220-250) / (4-3) MarginalUtility4 = -30Therefore, here we can see how the marginal utility of a piece of cake declines after the consumption of the previousone. Here, the highest utility is reached at the consumption of the 3rd piece, beyond whichthe total declined. This is aclassic example of diminishing marginal utility.QUESTIONS:Question #27: Marginal utility is theA) total satisfaction gained by consuming all units of a good.B) total satisfaction gained by consuming the last unit of the good.C) additional satisfaction gained by the consumption of one more unit of a good.D) additional consumption divided by the additional satisfaction gained by the additional consumption.Question #28: Jay-R eats five slices of pizza on a Saturday night but admits each slice of pizza doesn'ttaste as goodas the previous one. This suggests that for Jay-R theA) marginal utility of a slice of pizza is positive but decreasing.B) marginal utility of a slice of pizza is negative.C) total utility of slices of pizza is declining.D) total utility of slices of pizza is increasing by larger and larger increments.

The difference in Total Utility caused by consuming one more unit of a good is known as Marginal…

Question # 27: Marginal utility is the A) total satisfaction gained by consuming all units of a good. B) total satisfaction gained by consuming the last unit of the good. C) additional satisfaction gained by the consumption of one more unit of a good. D) additional consumption divided by the additional satisfaction gained by the additional consumption. Question # 28: Jay-R eats five slices of pizza on a Saturday night but admits each slice of pizza doesn'ttaste as good as the previous one. This suggests that for Jay-R the

Question # 27: Marginal utility is the A) total satisfaction gained by consuming all units of a good. B) total satisfaction gained by consuming the last unit of the good. C) additional satisfaction gained by the consumption of one more unit of a good. D) additional consumption divided by the additional satisfaction gained by the additional consumption. Question # 28: Jay-R eats five slices of pizza on a Saturday night but admits each slice of pizza doesn'ttaste as good as the previous one. This suggests that for Jay-R the

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.3P

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