At an optimal interior basket, why must the marginal utility per dollar spent on all goods be the same?
At an optimal interior basket, why must the marginal utility per dollar spent on all goods be the same?
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At an optimal interior basket, why must the marginal utility per dollar spent on all goods be the same?
Higher prices A) increase the marginal utility per dollar spent and cause consumers to buy more...
Higher prices A) increase the marginal utility per dollar spent and cause consumers to buy more of a good. B) increase the marginal utility per dollar spent and cause consumers to buy less of a good. C) lower the marginal utility per dollar spent and cause consumers to buy less of a good. D) lower the marginal utility per dollar spent and cause consumers to buy more of a good. E) do not change the marginal utility per dollar.
optimal choice
If P1=P2, then at the optimal choicex1 must be equal to x2X and Y must be normal goodsMU1 may equal MU2 but it is not necessarily soMU1 must equal MU2One way to look at the consumer's optimal choice is as one in which the marginal utility of the last dollar spentis higher in the more preferred goodsis equal to -P1/P2in all goods is the sameis equal to the marginal utility per dollar saved.If MU1/P1 < MU2/P2 and the consumer is...
Explain why total utility is maximized when the marginal utility per dollar from a good is...
Explain why total utility is maximized when the marginal utility per dollar from a good is equal across goods as
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for both goods. If the pric...
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for both goods. If the price of the cupcakes was $3 and the price of milk was $1.50, then: A) the marginal utility of cupcakes is two times the marginal utility of milk. B) the marginal utility of milk is two times the marginal utility of cupcakes. C) the marginal utility of both goods are equal. D) milk has a positive marginal utility, and cupcakes...
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for...
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for both goods. If the price of the cupcakes was $3 and the price of milk was $1.50, then: A) the marginal utility of cupcakes is two times the marginal utility of milk. B) the marginal utility of milk is two times the marginal utility of cupcakes. C) the marginal utility of both goods are equal. D) milk has a positive marginal utility, and cupcakes...
Explain why utility maximization subject to the budget constraint implies that the consumer purchases that basket...
Explain why utility maximization subject to the budget constraint implies that the consumer purchases that basket of commodities for which 1. all income is used up. 2. the marginal rate of substitution equals the price ratio. 3. the marginal utilities per dollar of the two goods are equal. If you use a diagram in your answer, make the diagram large and label all curves, axes, and points.
) John consumes two goods, X and Y. The marginal utility of X and the marginal utility of Y satis...
) John consumes two goods, X and Y. The marginal utility of X and the marginal utility of Y satisfy the following equations: MUX = Y MUY = X. The price of X is $9, and the price of Y is $12. a. Write an expression for Johnʹs MRS. b. What is the optimal mix between X and Y in Johnʹs market basket? c. John is currently consuming 15 X and 10 Y per time period. Is he consuming an...
Fill in the table below by calculating the marginal utility and marginal utility per dollar for...
Fill in the table below by calculating the marginal utility and marginal utility per dollar for the given data. Input your answers in the corresponding spaces that follow. Price = 17 Units Total Utility Marginal Utility (MU) Marginal Utility per dollar 0 0 1 283 2 449 3 499 Error in inputting table. required to answer marginal utility and marginal utility per dollar for each unit. (0-3)
A consumer with a fixed income will maximize utility when each good is purchased in amounts such that the: A-...
A consumer with a fixed income will maximize utility when each good is purchased in amounts such that the: A- Marginal utility per dollar spent is maximized for each good B- Marginal utility of each good is maximized C-Marginal utility per dollar spent is the same for all goods D- Average utility per dollar spent is the same for all goods E- Total utility is the same for each good
24. Suppose that for Jason the marginal utility of $50-per-serving caviar is 100 and the marginal...
24. Suppose that for Jason the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per- serving popcorn is 10. For his snack, Jason should buy the caviar if he has the $50; otherwise the popcorn b. the caviar if he has the $50; otherwise nothing a. the popcorn, whether he has the $50 or not d. one serving each of the caviar and popcorn, if he has $51 five servings of popcorn for each serving of...
Explain why total utility is maximized when the marginal utility per dollar from a good is equal across goods as
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for both goods. If the price of the cupcakes was $3 and the price of milk was $1.50, then: A) the marginal utility of cupcakes is two times the marginal utility of milk. B) the marginal utility of milk is two times the marginal utility of cupcakes. C) the marginal utility of both goods are equal. D) milk has a positive marginal utility, and cupcakes...
18. Carla purchased cupcakes and milk until the marginal utility per dollar spent was equal for both goods. If the price of the cupcakes was $3 and the price of milk was $1.50, then: A) the marginal utility of cupcakes is two times the marginal utility of milk. B) the marginal utility of milk is two times the marginal utility of cupcakes. C) the marginal utility of both goods are equal. D) milk has a positive marginal utility, and cupcakes...
24. Suppose that for Jason the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per- serving popcorn is 10. For his snack, Jason should buy the caviar if he has the $50; otherwise the popcorn b. the caviar if he has the $50; otherwise nothing a. the popcorn, whether he has the $50 or not d. one serving each of the caviar and popcorn, if he has $51 five servings of popcorn for each serving of...
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