True or false with reasoning 1)_______When an extra glass of wine is consumed, the total utility gained from the consumption changes by an amount of the marginal utility of all goods consumed. 2)_______Suppose that you consume two goods A and B, and that MUA/PA = 2 and MUB/PB = 4. With a given income and prices, the consumer will purchase more of good A and less of good B. 3)_______If you consume two goods, X and Y, and MUX > MUY, then you are willing to pay more for good X than for good Y.

True or false with reasoning 1)___When an extra glass of wine is consumed, the total utility gained from the consumption changes by an amount of the marginal utility of all goods consumed. 2)_Suppose that you consume two goods A and B, and that MUA/PA = 2 and MUB/PB = 4. With a given income and prices, the consumer will purchase more of good A and less of good B. 3)_____If you consume two goods, X and Y, and MUX > MUY, then you are willing to pay more for good X than for good Y.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

See similar textbooks

Similar questions

You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the following table. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility? What total utility will you realize? Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? Using the two prices and quantities for X, derive a demand schedule (a table showing prices and quantities demanded) for X.
Consider John who consumes two goods, (X and Y), with prices ?? = ?$35, ?? = ?$25 and income I =N$1500 i) Construct budget constraint and draw John’s budget line with good X on the horizontal axis. (ii) Use a graph to show the effect of an increase in income from N$1500 to N$2000. What will happen to the slope of the budget line if the price of good X decreases to N$18?
Complete each of the following sentences: Your tastes determine the _____________ you derive from consuming a particular good. _______________ utility is the change in ________________ utility resulting from a _______________ change in the consumption of a good. As long as the marginal utility is positive, total utility is ____________________________. The law of diminishing marginal utility states that as an individual consumes more of a good during a given time period, other things constant, total utility ________________________.
You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the table below. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility? What total utility will you realize? Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? Using the two prices and quantities for X, derive a demand schedule (price–quantity-demanded table) for X.
Question 8 My utility over goods 1 and 2 is given by: u(x1, x2) = min {2,} Where is the quantity of good 1 I consume and 2 is the quantity of good 2 I consume. Assuming I purchase only goods 1 and 2... If a = 6, b = 7, the price of good 1 is $5/unit, the price of good 2 if $6/unit and my income is $10, how much good 2 will I consume to maximize my utility? (Note: The answer may not be a whole number, so round your answer to the nearest hundredth) (Note: The numbers may change between questions, so read carefully)
c) Consider John who consumes two goods, (X and Y), with prices ?? = ?$35, ?? = ?$25 and income I =N$1500 i) Construct budget constraint ii) Draw John’s budget line with good X on the horizontal axis. iii) Use a graph to show the effect of an increase in income from N$1500 to N$2000. iv) What will happen to the slope of the budget line if the price of good X decreases to N$18?
Carol has very weird preferences. She only cares about quantity. When evaluating a bundle, Carol only looks at the highest amount of a good she can consume in each bundle, regardless of whether it is of eggs or dumplings. She is indifferent between two bundles only when the largest consumption of a good within each bundle is the same across bundles. So, for instance, if a bundle offers 5 eggs and 1 dumpling she finds that bundle indifferent to a bundle offering 4 eggs and 5 dumplings. These preferences are transitive. But are they monotone? And convex?
Use the following information to answer the next 3 questions. Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The price of X is $5, and the price of Y is $10. Units of the Good Total Utility of X Total Utility of Y 1 50 400 234 95 750 135 950 4 170 1100 5 200 1220 6 225 1320 7 245 1400 8 260 1450 Question A What is the marginal utility of the third unit of good Y? A. 20 B. 200 C. 316.7 D. 950 Question B If the consumer has $65 to spend on goods X and Y, what amount should be purchased of each in order to maximize utility? A. 1 unit of good X and 6 units of good Y B. 3 units of good X and 5 units of good Y C. 3 units of good X and 7 units of good Y D. 6 units of good X and 8 units of good Y Question C If the consumer has $110 to spend on goods X and Y, what optimal combination will the con- sumer choose? A. 6 units of good X and 8 units of good Y B. 7 units of good X and…
2. Tom spends all his $100 weekly income on two goods, apples and bananas. His utility function is given by U (A, B) = AB, where A and B stand for the quantity of apples and bananas consumed by Tom. If PA = $4 and PB= $10, how many apples and bananas will he consume? Make sure you write out the utility maximization problem explicitly, including the decision variable(s). What if his utility function is given by U (A, B) = A0.5B 0.5?
Give typing answer with explanation and conclusion Suppose that a consumer's utility function is U=x^5*y^3*z^3, where x is the consumption of mineral water, y is the consumption of soda and z is the consumption of pizza. The consumer has 2000 Euros while the price of mineral water is 15, the price of soda is 55 and the price of pizza is 30 Euros. How much/many soda does the consumer buy?
3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money,…
Would you expect total utility to rise or fall with additional consumption of a good? Why?