Question

9. Jeremy's level of satisfaction from consuming the first cookie was 25 utils. The second cookie increased the level of satisfaction by 20 utils. Jeremy's total level of satisfaction after three cookies was 60. Thus, the marginal utility for the third cookie is: A) 15. B) 60. C) 45. 10. A thirsty person has a second glass of water. Compared with the person's first glass total utility will: A) increase and marginal utility will decrease. B) increase and marginal utility will increase. C) decrease and marginal utility will increase. D) decrease and marginal utility will decrease. Use the following to answer question 11: Number of Movie Tickets Marginal Utility Total Utility 60 2 90 110 125 135 when 11. (Table) Fill in the marginal utilities for the table. Marginal utility falls by __ the number of movie tickets purchased increases from 2 to 3. A) 60 B) 10 C) 30 D) 0 12. Suppose Alan collects Yankees baseball cards. He has all but one and is willing to pay a very large sum of money for it. Alan's preferences: A) contradict the law of diminishing marginal utility because he should be willing to pay little for the last card. B) contradict the law of diminishing marginal utility because he should be satiated before he purchases the last card. C) do not contradict the law of diminishing marginal utility because the law deals with the consumption of exactly identical items in a given period. D) do not contradict the law of diminishing marginal utility because the law is not

Answer 1

9. The correct answer is 'Option A'.

Level of satisfaction from consuming first cookie = 25 utils

Level of satisfaction from consuming second cookie = 20 utils

Total level of satisfaction from consuming first two cookies = 25 utils + 20 utils = 45 utils

Total level of satisfaction from consuming three cookies = 60 utils

Marginal utility refers to the increase in total utility when one more unit of a good is consumed. It can be calculated by the following formula:

MC_​​​n​ = TC_{​​​​​n}​ - TC_{​​​​​n - 1}

TC_​ from consuming three cookies is 60 and the TC from consuming two cookies is 45. So, the marginal utility from consuming the third cookie equals 60 - 45 = 15. So, the marginal utility for the third cookie is 15 utils.

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