2. Total and marginal net utility The following table shows Cho's total utility from eating cakes. Quantity (Q) Total Utility (Cakes per month) (TU, $) Marginal Utility (MU, $) 0 0 1 10 2 18 3 25 4 29 5 30 6 26 If cakes were free, Cho would choose to eat cakes per month. Now (and for the rest of the question), assume that cakes cost $3 each. On the following graph, use the green points (triangle symbols) to plot Cho's total utility if she buys 0, 1, 2, 3, 4, 5, or 6 cakes per month. Then use the purple points (diamond symbols) to plot her total net utility (that is, total utility minus total expenditure) for those same quantities. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Remember to plot from left to right. Hint: Don't forget to include what happens at 0 cakes!
2. Total and marginal net utility The following table shows Cho's total utility from eating cakes. Quantity (Q) Total Utility (Cakes per month) (TU, $) Marginal Utility (MU, $) 0 0 1 10 2 18 3 25 4 29 5 30 6 26 If cakes were free, Cho would choose to eat cakes per month. Now (and for the rest of the question), assume that cakes cost $3 each. On the following graph, use the green points (triangle symbols) to plot Cho's total utility if she buys 0, 1, 2, 3, 4, 5, or 6 cakes per month. Then use the purple points (diamond symbols) to plot her total net utility (that is, total utility minus total expenditure) for those same quantities. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Remember to plot from left to right. Hint: Don't forget to include what happens at 0 cakes!
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
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Transcribed Image Text:2. Total and marginal net utility
The following table shows Cho's total utility from eating cakes.
Quantity (Q)
Total Utility
(Cakes per month)
(TU, $)
Marginal Utility
(MU, $)
0
0
1
10
2
18
3
25
4
29
5
30
6
26
If cakes were free, Cho would choose to eat
cakes per month.
Now (and for the rest of the question), assume that cakes cost $3 each.
On the following graph, use the green points (triangle symbols) to plot Cho's total utility if she buys 0, 1, 2, 3, 4, 5, or 6 cakes per month. Then use
the purple points (diamond symbols) to plot her total net utility (that is, total utility minus total expenditure) for those same quantities.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Remember to plot
from left to right.
Hint: Don't forget to include what happens at 0 cakes!
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