Homework Answers
A consumer is said to be in equilibrium when given his preferences, and price of the two goods, he pay out a given money income on the purchase of two goods so that he gets the maximum pleasure.
In other words a consumer is said to be in equilibrium when he enlarges his utility, given his income and the market prices.
Hence it can be said that in consumer equilibrium, the marginal utility from the consumption of the last dollar’s worth of each good is the same.
Hence option third is the correct answer.
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Question 13 (1 point) In consumer equilibrium, which of the following is true? The marginal utility...
If you are at the point of consumer equilibrium, which of the following is true? a....
If you are at the point of consumer equilibrium, which of the following is true? a. You have maximized your total utility. b. You have not yet reached the point where marginal utility is zero. c. You have not maximized your marginal utility. d. You have not yet reached your maximum total utility.
1) If a consumer is currently maximizing her satisfaction, what will happen to the marginal utility...
1) If a consumer is currently maximizing her satisfaction, what will happen to the marginal utility of a good when its price increases? The marginal utility will____ a. Increase, because the consumer will decrease her consumption of the good b. Decrease, because the consumer will increase her consumption of the good c. Decrease, because the consumer will decrease her consumption of the good d. Increase, because the consumer will increase her consumption of the good 2) the fixed cost of...
Suppose Mary is in consumer equilibrium. The marginal utility of good A is 30, and the...
Suppose Mary is in consumer equilibrium. The marginal utility of good A is 30, and the price of good A is $2. a. If the price of good B is $4, the price of good C is $3, the price of good D is $1, and the price of all other goods and services is $5, what is the marginal utility of each of the goods Mary is purchasing? b. If Mary has chosen to keep $10 in savings, what...
3) he theory of consumer behavior assumes that consumers attempt to maximize A) marginal utility. 1)...
3) he theory of consumer behavior assumes that consumers attempt to maximize A) marginal utility. 1) the difference between total and marginal utility. C) average utility. D) total utility. 34) The law of diminishing marginal utility states that A) beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer. B) price must be lowered to induce firms to supply more of a product C) it will take larger and larger amounts of...
Please help with these questions Question 1 0.8 pts Marginal utility O occurs when a consumer...
Please help with these questions
Question 1 0.8 pts Marginal utility O occurs when a consumer buys more of a good as a result of a relative price change O occurs when total utility declines as consumption increases. O occurs when there is a change in purchasing power as a result of a change in the price of a good. O is the additional satisfaction derived from consuming one more unit of a good or service. is the combination of...
17. Which statement is true? a. Diminishing marginal utility is equivalent to diminishing MRS2 1 → (where MRS2 1 → is de...
17. Which statement is true? a. Diminishing marginal utility is equivalent to diminishing MRS2 1 → (where MRS2 1 → is defined as the marginal rate of substitution of good 2 for good 1, in the usual manner). b. A consumer has diminishing MRS2 1 → if goods 1 and 2 are perfect substitutes. c. If two goods are perfect complements, a consumer will have diminishing MRS2 1 → . d. If a consumer has monotonic and strictly convex preference,...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B)...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B) marginal utility increases as consumption increases. C) marginal utility decreases as consumption increases. D) total utility decreases as marginal utility decreases E) total utility decreases as marginal utility increases. 9) Which of the following is the best example of how the invisible hands works? A) The government places restrictions on prices of products, B) The government decides to force firms to produce more electricity....
The Table below shows the Total Utility (TU) and Marginal Utility (MU) derived from the consumption...
The Table below shows the Total Utility (TU) and Marginal Utility (MU) derived from the consumption of 10 units of the commodities X and Y. a. Derive a column for the Marginal Utility of x (MU), and a column for the Total Utility of y (TU) b. On separate graphs, plot the Total and Marginal curves for each commodity, placing the panel of the marginal utility curve below the panel for the total utility curve for each commodity saturation and...
QUESTION 13 Quantity Per Week Total Utility Brook Kate Amy 100 5.0 9.9 147 190 no...
QUESTION 13 Quantity Per Week Total Utility Brook Kate Amy 100 5.0 9.9 147 190 no GN- 400 450 600 1200 1800 2400 3000 3600 4200 4800 5400 32.9 425 575 900 1275 1770 372 520 510 Refer to the above table. Brook's utility schedule shows initially decreasing marginal utility and then increasing marginal utility. increasing marginal utility throughout her entire schedule. Initially increasing marginal utility and then decreasing marginal utility. diminishing marginal utility throughout her entire schedule. QUESTION 14...
QUESTION 2 Which of the following statements is true? If total utility is at a maximum,...
QUESTION 2 Which of the following statements is true? If total utility is at a maximum, then marginal utility is zero. If total utility is at a maximum, then marginal utility is at a maximum. If total utility is at a maximum, then marginal utility is rising. O if total utility is at a maximum, then marginal utility is at its average value.
Suppose Mary is in consumer equilibrium. The marginal utility of good A is 30, and the price of good A is $2. a. If the price of good B is $4, the price of good C is $3, the price of good D is $1, and the price of all other goods and services is $5, what is the marginal utility of each of the goods Mary is purchasing? b. If Mary has chosen to keep $10 in savings, what...
3) he theory of consumer behavior assumes that consumers attempt to maximize A) marginal utility. 1) the difference between total and marginal utility. C) average utility. D) total utility. 34) The law of diminishing marginal utility states that A) beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer. B) price must be lowered to induce firms to supply more of a product C) it will take larger and larger amounts of...
Please help with these questions
Question 1 0.8 pts Marginal utility O occurs when a consumer buys more of a good as a result of a relative price change O occurs when total utility declines as consumption increases. O occurs when there is a change in purchasing power as a result of a change in the price of a good. O is the additional satisfaction derived from consuming one more unit of a good or service. is the combination of...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B) marginal utility increases as consumption increases. C) marginal utility decreases as consumption increases. D) total utility decreases as marginal utility decreases E) total utility decreases as marginal utility increases. 9) Which of the following is the best example of how the invisible hands works? A) The government places restrictions on prices of products, B) The government decides to force firms to produce more electricity....
The Table below shows the Total Utility (TU) and Marginal Utility (MU) derived from the consumption of 10 units of the commodities X and Y. a. Derive a column for the Marginal Utility of x (MU), and a column for the Total Utility of y (TU) b. On separate graphs, plot the Total and Marginal curves for each commodity, placing the panel of the marginal utility curve below the panel for the total utility curve for each commodity saturation and...
QUESTION 13 Quantity Per Week Total Utility Brook Kate Amy 100 5.0 9.9 147 190 no GN- 400 450 600 1200 1800 2400 3000 3600 4200 4800 5400 32.9 425 575 900 1275 1770 372 520 510 Refer to the above table. Brook's utility schedule shows initially decreasing marginal utility and then increasing marginal utility. increasing marginal utility throughout her entire schedule. Initially increasing marginal utility and then decreasing marginal utility. diminishing marginal utility throughout her entire schedule. QUESTION 14...
QUESTION 2 Which of the following statements is true? If total utility is at a maximum, then marginal utility is zero. If total utility is at a maximum, then marginal utility is at a maximum. If total utility is at a maximum, then marginal utility is rising. O if total utility is at a maximum, then marginal utility is at its average value.
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