Question

Complete the following table of Scout's utility from drinking cans of soda and answer the questions below. Instructions: If you are entering any negative numbers be sure to include a negative sign() in front of these numbers Cans of Soda 0 Total Utility Marginal Utility 2 22 I5 I 6 a. At what point does marginal utility begin to fall? Marginal utility falls with the (Click to select) soda. b. Will Scout consume the seventh can of soda? Explain your answer Yes, because Scout receives 42 units of utility Yos, because Scout is a utility maximizer No, because it is too expensive No, because it reduces total utility . c. True or false? Scout will be following the utility-maximizing rule by consuming two cans of soda Explain your answer Uncertain. We don't know whether Scout is following the utility maximizing rule without more information True Scout is following the utility maximizing rule because marginal utility is at its maximum False Scout is not following the utility-maximizing rule because he can gain more utility by consuming the 3rd can of soda

Answer 1

Cans	TU	MU
0	0	0
1	10	10
2	22	12
3	32	10
4	40	8
5	44	4
6	44	0
7	42	-2

a) At the point of 4th marginal utility began to fall.

b) 7th unit of soda not consumed, because it reduces total utility and also marginal utility becomes negative.

c) True, scout will follow utility maximising rule, by using two units of soda with maximum marginal utility.