The indifference curve for Jim, who enjoys muffins and croissants, is illustrated below. Jim is currently consuming 8 muffins and 8 croissants. Which of the following trades would he accept? O give up 2 muffins for 7 croissants O give up 8 croissants for 2 muffins O give up 4 muffins for 3 croissants O give up 2 muffins for 1 croissant
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- Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utility—maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.Bill gets 100 utils from eating one candy bar per day. He gets 120 utils from eating two candy bars per day. Calculate the marginal utility. O. 220 utils 100 utils 120 utils 20 utils Tamera calculates her utility for two hours of studying each day to be 300 utils. Her total utility for three hours is also 300 utils. Calculate the marginal utility. 300 utils 600 utils O 150 utils no marginal utility11:55 The table below shows the per unit prices and marginal utility for the last unit of waffles and donuts that Luke purchased. Waffles Price per unit Marginal utility Luke spent all of his allocated budget on waffles and donuts. To maximize his utility, Luke should purchase O fewer of both goods O fewer waffles and more donuts O equal amounts of both goods O more both goods O more waffles and fewer donuts $25 Donuts 50 $10 50
- Martha spends 5 hours of free time exercising and playing music per day. The table below represents the level of utility she receives from the various combinations of exercise and music activities. For instance, if she only plays music, her total utility from exercise will be 0, and the utility from music will be 50. If she exercises for 1 hour, she will receive a level of utility of 25. Utility is measured in 'utils'; those numbers are arbitrary and designed to quantify the benefits received from various actions. Utility Utility from from Exercise Music 50 utils from 5 hours of O utils from O hours of exercise music 25 utils for 1 hours of exercise 45 utils from 4 hours of music 40 35 45 20 50 The utility patterns in the table illustrate the law of marginal diminishing utility because... LOThe following table shows Ellie's utility from consuming slices of pie and cans of 7 - Up. Slices of Pie 0 1 23456 Marginal Utility Cans from Last Slice of 7-Up 0 1 2 120 100 80 60 40 20 234 5 6 Marginal Utility from Last Can 120 60 45 30 20 15 Suppose Ellie has $6 per week to spend on pie and 7 - Up and that the price of a slice of pie is $1.00. 1.) Use the point drawing tool to plot Ellie's demand for 7-Up at a price of $2.00. Label this point 'A'. 2.) Use the point drawing tool to plot Ellie's demand for 7- Up at a price of $0.50. Label this point 'B'. 3.) Use the line drawing tool to connect the dots to form Ellie's demand curve. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Price of 7-Up 12 4.5- 4- 3.5- 3- 2.5- 2- 1.5- 1- 0.5- 0- 3 4 Quantity of 7-Up 5The following table presents information on Angel's marginal utility and price paid for the consumption of Pomegranates and Oranges, which are the only two goods that he consumes. Angel OYes ONO ONot enough information What should Angel do? Pomegranates Price $4 Based on the utility maximizing rule, Is Angel maximizing their utility? OPurchase more Pomegranates and less Oranges OPurchase less Pomegranates and more Oranges OMake no changes Marginal Utility MacBook Air 7 Oranges Price $12 Marginal Utility 31
- Units of rice 1 2 3 4 5 6 7 8 O 50 utils O 53 utils O 28 utils Marginal Utility of rice O 25 utils 20 18 16 14 12 10 9 8 Units of raisins 1 2 3 4 5 6 7 If the consumer buys 2 units of rice and 2 units of raisins, the consumer's total utility will be O 4 utils 8 Marginal Utility of raisins 8 7 6 5 4 3 2 1Quanity Utility from Video Games Utility from Novels Marginal Utilty Video Games Marginal Utilty Novels Marginal Utilty per Dollar Video Games Marginal Utilty per Dollar Novels 0 0 0 1 30 30 2 40 38 3 48 44 4 54 46 5 58 47 The table shows the utility that Mark gets from the consumption of video games and novels. Mark has $100 per month to spend on video games and novels. Video game cost $20 each and novels cost$20 Calculate Mark’s utility from Video game Novels Calculate the MU per dollar of Mark’s consumption choices State the optimal number of video games and the optimal number of novels that Mark will conume in a month. State how each of the following will affect the quantity of VG and N consumed by Abina An increase in the money she has to spend by $20, ceteris paribus An increase in the price of ONE of the goods, ceteris paribusI like drinking Smirnoff and Stoli Vodka, but I really only careabout the total amount of alcohol I get out of it. They areperfect substitutes. Smirnoff is sold in liter bottles that are100 proof (that’s 50% alcohol). Stoli is sold in liter bottlesthat are 80 proof (40% alcohol). What is my utility functionfor bundles of these two vodkas? What do my indifferencecurves look like?
- Jacob is a Lego maniac, but he also likes Super Soaker squirt guns. The following table shows Jacob's total utility and marginal utility from Legos and squirt guns measured in utils: Quantity of Legos 0 1 2 3 4 5 TU 0 20 37 50 60 65 MU MU/P 20 17 13 10 5 Quantity of Squirt TU Guns 0 1 2 3 4 5 0 50 75 90 100 102 MU 50 25 15 10 2 MU/P a. Suppose the price of Legos is $5 per set and the price of a squirt gun is $8 per gun. Compute the marginal-utility-to-price ratios for Legos and squirt guns and enter these values in the table. b. How many sets of Legos and how many squirt guns will Jacob purchase if he has $26 to spend? Carefully explain how you arrived at your answer. c. Now suppose the price of Legos falls to $2.50 per set while the price of squirt guns stays the same. How many sets of Legos and how many squirt guns will he purchase? Show how you arrived at your answer. d. Draw Jacob's demand curve for Legos between the prices $5 per set and $2.50 per set. Why does it have a negative…Every day Noora spends her lunch money consuming apples, at RO1 each, and Oranges, at RO2 cach. At her current level of consumption, Noora's marginal utility of apples is 12 and her marginal utility of oranges is 18. If she has already spent all of her lunch honeyỹ, how should Noora change her consumption decision tó maximize utility? She should makeʼno changes: she is consuming the utility maximizing Combination ofapplès and oranges. 6) She should increase her apple consumption and decrease her consumption until the marginal utility per dollar is equal for bóth. c. She should decrease hef apple consumption and increase her orange consumpțion until the marginal utility per dollar is equal for both. d. She should increase her apple consumption and increase her orange consumption until the marginal utility is equal for both: orangeThe table shows the marginal benefit that Marcus derives by consuming different quantities of hotdog and soda. The price of a hotdog is $3, and the price of a soda is $1. Soda Marginal Benefits ($) Marginal Benefits ($) 10 ITT 8 6 4 2 1 0.6 What is the optimal combination of Soda and Hotdog for Marcus, if his weekly budget for hotdog and soda is $14? Quantity 2 3 4 5 6 O A. 2 sodas, and 4 hotdogs O B. 3 sodas, and 3 hotdogs O C. 5 sodas, and 3 hotdogs O D. 6 sodas, and 5 hotdogs Hotdog 18 12 6 3 1