If your income is R9 and the per unit price of X and Y is R2 and R1 respectively, what quantities of each good will you purchase to maximise utility? What total utility will you realise? Units of X MUX MUX / PX Units of Y MUY MUY / PY 1 10 5 1 8 8 2 8 4 2 7 7 3 6 3 3 6 6 4 4 2 4 5 5 5 3 1.5 5 4 4 6 2 1 6 3 2
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If your income is R9 and the per unit price of X and Y is R2 and R1 respectively, what quantities of each good will you purchase to maximise utility? What total utility will you realise?
Units of X |
MUX |
MUX / PX |
Units of Y |
MUY |
MUY / PY |
1 |
10 |
5 |
1 |
8 |
8 |
2 |
8 |
4 |
2 |
7 |
7 |
3 |
6 |
3 |
3 |
6 |
6 |
4 |
4 |
2 |
4 |
5 |
5 |
5 |
3 |
1.5 |
5 |
4 |
4 |
6 |
2 |
1 |
6 |
3 |
2 |
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- Product M has a price of $7.95. If the Total Utility an individual receives from consuming 8 units of Product M is 249 and the Total Utility for consuming one fewer unit of Product M is 228, then what is the Marginal Utility per Price of the 8th unit of Product M? (Round your answer to 2 digits after the decimal.)Learning Journal prompt: For Unit 4 Learning Journal, you will use the marginal utility formula to choose between two products. Catherine is having dinner at the Yellow Restaurant. She wants desert after eating her entree. She is trying to decide between a cookie or a slice of pie. The cost of a cookie is $5 and the cost of a slice of pie is $8. Refer to the Unit 4 Learning Journal Marginal Utility spreadsheet Compute the marginal utility for cookie and slice of pie Compute the marginal utility per dollar What is the utility maximizing choice for a cookie and slice of pie? Explain what the utility maximizing choice means. Discuss how you could use marginal utility to make consumer choicesLee has calculated her marginal utility from buying pizza slices and soda (shown on the table in the worksheet) and wants to use these data to decide how to rationally spend the money she has. The price of pizza is $2.00 and the price of soda is $2.00 question 9 (a) given these prices and your worksheet calculations, what is the first product lee will buy? (b) would lee ever buy four slides of pizza? Why/why not? question 10Given the data in your worksheet, how many pizza slices and sodas lee should buy to maximize her total utility if she rationally spends her budget of 10.00? question 11 when the price of pizza changes, lee's MU/$P changes. If the price of pizza decreases to $1.50 and her budget decreases to $7.50, how many pzza slices and sodas lee should buy to maximize her total utility?
- EXERCISE 7 Aisha is considering how to allocate the next 6 hours of her free time. She could choose between leisure (L) and helping her neighbour with the house chores. If she decides to help her neighbour, she is going to get paid at £25 per hour, which she can then spend on her favourite pizza (P). Suppose the price of pizza is £12.50. Aisha's preferences for leisure and pizza are given by the following utility function: U(L, P) = 3L + P. (MU₁ = 3, MUp = 1). a) Write down Aisha's budget equation and draw the corresponding budget line. Clearly label the axes and calculate the coordinates of the points of intersection of the budget line with each axis. b) Calculate Aisha's marginal rate of substitution between leisure and pizza. Explain the concept of MRS and interpret the figure obtained. c) Find Aisha's optimal consumption bundle, both algebraically and graphically. Explain your reasoning. d) Would Aisha's optimal choice change if she could get a discount on her pizza purchases so…Elapsed time (in minutes) 30 60 90 120 150 Total utility of playing video games 20 45 63 78 83 40 62 72 76 76 Total utility of swimming ▸ Jenny pays $5 per hour to use the local swimming pool. What is her marginal utility per dollar for the first half hour of swimming?Digital Apps per Period 0 1 2 3 4 5 Total Utility of Digital Apps per Period (utils) which 0 50.0 95.0 135.0 171.5 200.0 Marginal Utility (utils) 50.0 45.0 40.0 36.5 28.5 Marginal Utility Portable per Dollars Spent Power Banks (price = $5.97) per Period | 8.4 7.5 6.7 6.1 4.8 0 1 GTA W N 3 4 5 Total Utility of Portable Power Banks per Period (utils) 0 25 47 65 80 89 Marginal Utility (utils) 25 22 18 15 9 Marginal Utility per Dollars Spent (price = $2.70) 9.3 8.1 6.7 5.6 3.3 Consider the table above. Suppose the consumer's income is $26. Does the consumer spend all of her income if she purchases the optimal quantities of digital apps and portable power banks? The optimum quantity of digital apps purchased is and the optimum quantity of portable power banks purchased is. (Enter your responses as whole numbers.) Spending on digital apps is $ and spending on portable power banks is $. (Enter your responses rounded to one decimal place.) Thus, total spending at the consumer optimum is $ the…
- The marginal utility derived from the consumption of extra unit of commodity. True/FalseWhen the consumer buys 60 units of quantity of goods at a price of 3 per unit what would be the total expenditure!!!!Exercise Suppose the utility function of a person consuming two commodities X and Ywith income Birr 600 is given by U = 2 X 06Y 04 If the per unit price of X is Birr 20 and per unit price of Y is Birr 40 a) What is the utility maximizing level of consumption of X & Y ? b) Find the MRSyy at the optimum ?
- The following gives the marginal utility of John’s consumption of three goods A, B and C.Unit of consumption MUaMUbMUc1202545218203031615244141018512815610612 Goods A, Band C costs ksh2, ksh1 and ksh3 respectively. How many units of each good should a consumer take to maximize utility with an income of ksh12Calculate marginal utility and marginal utility per dollar for the data provided in the table below: (round to two decimal places) The Price of wine is 3 The Price of Cheese is 0.14 The Consumer's budget for wine and Cheese is 9.69 (WINE) (WINE) (CHEESE) (CHEESE) (CHEESE) GLASSES (WINE) WEDGES OF WINE MARGINAL OF CHEESE TOTAL UTILITY MARGINAL UTILITY MARGINAL TOTAL UTILITY MARGINAL UTILITY UTILITY/dollar UTILITY/dollar 1 70 10 Number Number Number Number 35 160 6 Number 65 Number 225 3 41 Number Number Number Number 4 45 4. 288 Number 61 Number 48 349 The Quantity of Wine this consumer would buy to maximize utility is : Number Number The Quantity of Cheese this consumer would buy to maximize utility is : What is the consumer's Total Utility when optimized : NumberElapsed time (in minutes) 30 60 90 120 150 Total utility of playing video games 20 45 63 78 83 Total utility of swimming 40 62 72 76 76 Jenny spends an average of $3 each hour she plays video games. What is her marginal utility per dollar for the second half hour?