Question

2. Total and marginal utility Yakov enjoys drinking milk, since his mother tells him it will make him grow up strong. The following table contains information on Yakov's utility from milk each day. FW in the two missing cells of the table. Milk (Glasses) Total Utility (Utils) Marginal Utility (Utils per glass) 200 210 On the following graph, use the purple points (diamonds symbol) to plat Yakov's total utility (TU) curve if he consumes zero, one, two, three, four, five, or six glasses of milk per day. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically TOTAL UTILITY (Utils) MILK (Glasses) On the following graph, use the blue points (circle symbol) to plat Yakov's marginal twy (MU) curve from conswing his first six glasses of milk MARGINAL UTILITY (Utils) MILK (Classes) For Yakov, increasing his consumption of milk results in marginal utility.

Answer 1

We have the following information after completing the table -

Milk	Total Utility	Marginal Utility
0	0
1	60	60
2	110	50
3	150	40
4	180	30
5	200	20
6	210	10

Total Utility 250 210 200 200 180 150 150 110 100 60 50 3 4

Marginal Utility 70 60 60 50 50 40 30 30 20 10 10 2 3 4 20 40

For Yakov, increasing consumption results in decreasing marginal utility.

3)

Van’s utility is maximised when MUm/MUj = Pm/Pj

Here, Mum/MUj = 30/30 = 1

Pm/Pj = ½

As Mum/Pm > MUj/Pj, he could buy more glasses of milk and less juice and be better off. Option d) is correct.

Combination	Milk	MUm	Mum/Pm	Juice	Muj	Muj/Pj	Consumer equilibrium
A	200	40	40	100	35	17.5	No
B	400	20	20	200	30	15	No
C	300	30	30	300	25	12.5	No
D	500	10	10	400	20	10	Yes