Question

12. (Table) Based on the table, the marginal utility from consuming the fourth root beer is utils. Root Beer Candy Bars Quantity Total Utility Quantity Total Utility 0 0 0 60 1 80 2 110 - 2 I 3 150 180 230 200 240 A) 40 B) 20 C) 30 D) 50 13. Jenn's marginal utility of the last candy bar consumed is 8 and her marginal utility of the last smoothie consumed is 20. If candy bars cost $2 and smoothies cost $4, which statement is true according to the utility maximization rule? A) Jenn is maximizing her utility. B) Jenn must consume more candy bars and less smoothies to maximize utility. C) Jenn must consume more smoothies and less candy bars to maximize utility. D) Jenn must consume less of both candy bars and smoothies to maximize utility. 14. A company specializing in foreign language lessons sells one set of lessons for $199, but all five sets of lessons purchased upfront sell for $499, a discount of nearly 50%. The company is offering this large discount in hopes that its consumers experience: A) a sense of altruism. B) a sunk cost fallacy. C) a framing bias. D) overconfidence. 15. Helping a friend struggling to pass a math class despite it taking valuable time away from your own studies is an example of: A) framing. B) sunk cost. overconfidence. D) altruism.

Answer 1

12) Marginal utility = change in total utility/change in consumption

Marginal utility of the 4th root beer = 180-150/4-3 = 30

option(C)

13) MU/P for candy bar = 8/2 = 4

MU/P for smoothie = 20/4 = 5

MU/P for a smoothie is greater than MU/P for candy bar so Jenn should consume more smoothie and less candy bar

option(C)

As per HOMEWORKLIB RULES, more than one question is answered