Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of
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- Imagine, we are in ancient Greece. Praxilla lives in Athens and 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 first 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 cucumbers consumed. A poem costs three bronze coins, but a cucumber only costs one bronze coin. Praxilla has 18 bronze coins. 1. Sketch Praxilla’s 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…arrow_forwardPraxilla who lived in ancient Greece derives utility from Reading poems and from eating cucumbers. Priscilla gets 30 units of marginal utility from her first poem, 27 units of marginal utility from her second poem, and so on with marginal utility declining by 3 units for each additional poem. Praxilla get 6 units of marginal utility for each of her first three cucumbers consumed, 5 units of marginal utility for each of her next three cucumbers consumed and so on with marginal utility declining by one for every three cucumbers consumed. A poem costs 3 Bronze coins but a cucumber cost only one bronze coin. Praxilla has 18 bronze coins. Create a table and identify her 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.arrow_forwardSuppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is $1.50 per pound, and pork is $3.00 per pound. Assuming you have studied economics and achieved consumer equilibrium, the ratio of your marginal utility of beef to your marginal utility of pork isarrow_forward
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc