Question

The table below shows Heather's evaluation of different quantities of pairs of shoes: 

Pairs of Shoes	Total Utility	Marginal Utility
0	$0
1	$110
2	$210
3	$280
4	$320
5	$350

a. (1 pt) Complete the Marginal Utility column in the table above. 

b. (1 pt) How much is marginal utility when Heather goes from buying 3 pairs of shoes to 4 pairs? What does this number mean? 

c. (1 pt) Assume that the price of a pair of shoes is $100. How many pairs should Heather buy? 

d. (1 pt) Prepare a demand schedule showing Heather's demand for shoes. Explain the reasoning behind her demand. 

e. (1 pt) Graph the demand curve. Then, explain why diminishing marginal utility implies that the demand curve slopes downward (negative slope). 

f. (1 pt) is Heather's marginal utility for shoes likely to change if her income decreases? Explain.

Answer 1

Answer 2

TE Paur dshoes TU MU TUn-TUn-I. 2 2 0 loo 3 280 320 70 4 40 3 50 30 40, t means additionalpaur of hoes gives uttliky =40. At P= 100 muPr pairs Shoes wiu be brousut as at aair Shoes Psnmv:Yoo 30 40 7 o 4 2 So Qd as Pmice MU