Consider the following pairs of goods available from Starbucks: a.) 8 oz. cup of coffee and 16 oz. cup of coffee b.) 8 oz. cup of coffee and coffee cup lid c.) 8 oz. cup of coffee and piece of coffee cake Match each pair of goods with one of the following graphs. Explain your reasoning: 1.) 2.) 3.)

Consider the following pairs of goods available from Starbucks: a.) 8 oz. cup of coffee and 16 oz. cup of coffee b.) 8 oz. cup of coffee and coffee cup lid c.) 8 oz. cup of coffee and piece of coffee cake Match each pair of goods with one of the following graphs. Explain your reasoning: 1.) 2.) 3.)

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 5CQQ

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

Problem 5
Consider the following pairs of goods available from Starbucks:
a.) 8 oz. cup of coffee and 16 oz. cup of coffee
b.) 8 oz. cup of coffee and coffee cup lid
c.) 8 oz. cup of coffee and piece of coffee cake
Match each pair of goods with one of the following graphs. Explain your reasoning:
1.)
2.)
3.)

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(b) If the consumer is consuming exactly two goods, and he is always spending all of his money, can both of them be inferior goods?
4. Describe what is meant by a normal good. Provide a real-life example in your own words. What is an inferior good? How does a change in income impact the demand for inferior goods?
Question 1 Which of the following statements is NOT true? O Total utility is the satisfaction from the entire consumption of a good O Marginal utility is the additional satisfaction from consuming the last unit of a good Utility measures the satisfaction obtainefrom a good Both represent the satisfaction obtained from most all goods and services
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1. Based on the table below describe Marginal Utility and Diminishing Marginal Utility? What happens as you consume more and more apples? At what point is utility maximised? Units of Apples Consumed Total Utility (TU) Marginal Utility (MU) 1 10 10 2 18 8 3 24 6 4 28 4 5 30 2 6 30 0 7 28 -2
Table A – Faris Daily Consumption Dozens of Oysters Total Utility Marginal Utility per Day 1 60 104 3 134 4 152 5 160 Number of Total Utility Marginal Utility Root Beers per Day 1 40 70 3 94 4 114 5 128 Refer to Table A shows Faris's consumption on the oysters and root beers per day for a total five days; i. Compute Faris's marginal utility of for consumption of dozens of oyster and number of root beers per day ii. At what units per day Faris's Diminishing Marginal Utility sets in for consumption of dozens of oyster and number root beers per day. iii. Please briefly explain why Faris will experience the Diminishing Marginal Utility as he consumes more unit of oysters and root beers.
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. TOTAL AND MARGINAL UTILITY E UTILITY CALCULATIONS Reset Total Utility Quantity Consumed Total Marginal Utility 70 Utility 60 50 22 40 1 22 30 18 20 2 40 10 14 3 4 6 8 3 54 Quantity Consumed Marginal Utility 10 20 4 64 6. 10 70 4 6. -10 72 -20 -2 Quantity Consumed 70 Quantity Consumed -6 8 64 2. 4 6 8
Units of the Good 0 1 5678AWN2 3 4 Total Utility Total Utility of X of Y 0 0 620 1740 1120 3030 1500 3960 1820 4710 2080 5280 2300 5730 2460 6060 2580 6300 For the next 3 questions, assume that an individual consumes two goods X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The prices of X and Y are, respectively, $20 and $30. If the consumer buys the fourth unit of X the Marginal Utility per Dollar Spent on X is 16 I If the consumer has $210 to spend on X and Y, the utility-maximizing bundle is The minimum budget necessary to move to a higher equilibrium consumption of X and Y is $ unit(s) of X and unit(s) of Y.
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