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Q5.      Suppose that marginal utility of Good X = 100, the price X is $10 per unit, and the price of Y is $5 per unit. Assuming that the consumer is in equilibrium and is consuming both X and Y, what must the marginal utility of Y be?   

P12.     The following tables illustrate Eileen’s utilities from watching first-run movies in a theater and from renting movies from a video store. Suppose that she has a monthly movie budget of $36, each movie ticket costs $6, and each video rental costs $3.

1. Complete the tables.
2. Do these tables show that Eileen’s preferences obey the law of diminishing marginal utility? Explain your answer.
3. How much of each good will Eileen consume in equilibrium?
4. Suppose the prices of both types of movies drop to $1 while Eileen’s movie budget shrinks to $10. How much of each good will she consume in equilibrium?       

       

     

P14.     Daniel allocates his budget of $24 per week among three goods. Use the following table of marginal utilities for good A, good B, and good C to answer the questions below:

           

    1    If the price of A is $2, the price of B is $3. and the price of C is $1, how much of each will Daniel purchase in equilibrium?

     2   If the price of A rises to $4 while other prices and Daniel’s budget remain unchanged, how much of each will he purchase

           in equilibrium?

     3   Using the information from parts (a) and (b), draw the demand curve for good A. Be sure to indicate the price quantity    

            demanded for each point on the curve.

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• Mithun answered this

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  Q2. Your tastes determine the utility you derive from consuming a particular good. Marginal utility is the change in total utility resulting from a unit change in the consumption of a good. As long as marginal utility is positive, total utility is increasing.

  The law of diminishing marginal utility states that as an individual consumes more of a good during the given time period, other things constant, total utility increases at a decreasing rate.

  Q3. The total utility can be positive while the marginal utility is negative.

  When the marginal utility becomes negative after the highest point on the total utility curve, the total utility starts decreasing. In such a scenario, the total utility remains positive while the marginal utility is negative.

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Answer 1

As per HOMEWORKLIB RULES, in case of multiple questions only the first question is to be answered

Kindly ask rest of the questions in a separate post.

1.

At utility maximizing level of consumption,

MUX/PX = MUY/PY

Substituting the given values,

100/10 = MUY/5

MUY = 50

Thus, MUY = 50 utils