Question

9. In the table, as Samuel's consumption of ice cream cones increases, Ice Cream Cones Total Utility 1 50 2 90 3 125 150 5 165 175 A) both his total utility and his marginal utility increase. B) his total utility increases, but his marginal utility decreases. C) his total utility decreases, but his marginal utility increases. D) his total utility increases, and his marginal utility decreases then increases. 10. (Table) The table shows the total and the marginal utility for bottles of root beer. Referring to the table, the marginal utility of the third bottle of root beer will be units of utility. Bottles of Total Utility Marginal Utility Root Beer 2020 18 3 53 11 70 6 A) 16 B) 15 C) 14 D) 12 11. (Table) The table shows Popeye's preferences for cans of spinach. Based on the table, which statement is correct? Cans of Spinach Total Utility 4 55 7 63 18 61 A) The marginal utility of the sixth can is 63. B) The marginal utility of the sixth can is 3. C) The eighth can of spinach would be consumed. D) The marginal utility is maximized with six cans.

Answer 1

Before we start we must know about Marginal Utility :

Marginal Utility is the increase in total utility for each additional unit consumed.

Marginal Utility at n^{​​​​​​th} unit = Total Utility at n^{​​​​​​th} unit - Total Utility at (n-1)^th unit

9. We can see as the Samuel's consumption of ice-cream cones increases from 1 to 6 the total utility also increases continuously from 50 to 175.

Now, Marginal Utility of each level of outputs are :

• For 1 ice-cream cone , Marginal Utility = 50 - 0 = 50
• For 2 ice-cream cone, Marginal Utility = 90 - 50 = 40
• For 3 ice-cream cone, Marginal Utility = 125 - 90 = 35
• For 4 ice-cream cone, Marginal Utility = 150 - 125 = 25
• For 5 ice-cream cone, Marginal Utility = 165 - 150 = 15
• For 6 ice-cream cone, Marginal Utility = 175 - 165 = 10

So we can see from above calculation that as the Samuel's consumption of ice-cream cone increases the Marginal Utility falls from 50 to 10.

Hence, Samuel's Total utility increases but his Marginal Utility decreases as ice-cream cone increases.

So, Option B) is correct

10. As per the formula of Marginal Utility :

Marginal utility of 3^rd bottle of Root Beer = Total Utility at 3 bottles - Total Utility at 2 bottles

Total Utility at 3 bottles is given = 53

But, We need to find total utility at 2 bottles with the help of Marginal Utility at 2^nd bottle

We know,

Marginal utility of 2^nd bottle = Total Utility at 2 bottles - Total Utility at 1 bottle

So, 18 = Total Utility at 2 bottles - 20

So, Total Utility at 2 bottles = 18 + 20 = 38

Now we can find the Marginal Utility of third bottle

Marginal utility of 3^rd bottle of Root Beer = 53 - 38 = 15

So, Option B) 15 is correct

11. Let's see each option one by one to check :

Option A says Marginal Utility of sixth can is 63

Marginal utility of sixth can = Total Utility at sixth can - Total Utility at fifth can

= 63 - 60 = 3

So, Option A is wrong.

Option B says Marginal Utility of sixth can is 3

As, We have calculated above

Marginal utility of sixth can = 3

So, Option B is correct

Option C says eighth can of spinach should be consumed

We can see from above,

Marginal utility of eighth can = 61 - 63 = -2

So Marginal Utility of eighth can is negative and hence should not be consumed

So, Option C is wrong

Option D says Marginal Utility is maximized with six cans

We can see, At sixth can Marginal Utility = 63 - 60 = 3

But at fifth can Marginal Utility = 60 - 55 = 5

So, Marginal Utility at fifth can is more than sixth can and hence can be maximized

So, Option D is wrong

So, Only Option B) is correct

Hence, Option B) is correct