tility (TU) and Marginal Utility (MU) Total Utility (TU) Consumption Quantity (C) Marginal Utility (MU) XXX 1 15 27 3 36 4 42 47 51 54 8. 56 (a) Fill up the column of Marginal Utility (MU) by using the following formula: TU, - TU MUj C- C (b) Using Excel to calculate Marginal Utility (MU) to double check your answer in part (a): (c) Using Excel to graph the Total Utility (TU) and Marginal Utility (MU) curves,
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Answer:
(a).
The formula of marginal utility:
Consumption Quantity (C) | Total Utility (TU) | Marginal Utility (MU) |
0 | 0 | xxx |
1 | 15 | |
2 | 27 | |
3 | 36 | |
4 | 42 | |
5 | 47 | |
6 | 51 | |
7 | 54 | |
8 | 56 |
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- Imagine you have a movie streaming platform that offers new movies at the time of release. Your market research has revealed the following about your typical consumers’ satisfaction from watching movies: Number of movies (per month) Total Utility or Satisfaction 0 0 1 25 2 47 3 66 4 82 5 94 6 105 The maximum number of movies the consumer watches in a month is 6. (a) Construct a third column for this table to derive “Marginal Utility” corresponding to the number of movies watched. Explain in words what this concept means and why it is important to derive the marginal utilities in pricing.Define Economic utilityUTIITY (Units of utility) 10 Suppose your friend Deborah offers you the following bet: She will flip a coin and pay you $2,000 if it lands heads up and collect $2,000 from you if it lands tails up. Currently, your level of wealth is $6,000. The graph shows your utility function from wealth. Use the graph to answer the following questions. 100 90 80 B 70 A 60 50 40 30 20 10 WEALTH (Thousands of dollars)