ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
A consumer attains maximum utility when:
Select one:
a)
b) Marginal utility per dollar spent is increasing for every good purchased
c) Marginal utility per dollar spent is same for every good purchased
d) Marginal utility per dollar spent is negative for every good purchased
e) Marginal utility per dollar spent is decreasing for every good purchased
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- The price of goods A and B are 20 and 10 respectively. given that the marginal utility of commodity A is 10. what is the marginal utility of B if the consumer is at equilibrium.arrow_forwardA consumer facing a budget constraint will typically choose a combination of goods and services that: a) Provides the highest total utility b) Minimizes the total cost of consumption c) Equalizes marginal utility per dollar spent on each good d) Matches their preferences regardless of budget limitationsarrow_forwardSuppose that the price of good X is $6 and the price of good Y is $2. You have $144 to spend and your preferences over X and Y are defined as: U(x,y) = x2/3y1/3 Calculate the marginal utility of X Calculate the Marginal Utility of Y What is the optimal Choice of X and Y given the PX = $6, PY = $2 and I = $144 If Income is increased to $150 calculate how the optimal choice of X and Y changearrow_forward
- Suppose your income is 200, the price of good x is 2, and the price of good y is 3. You know that your utility function is U= 2(xy)^3. (A) What amounts of x and y do you choose? (B) Can you generalize your choices to demand curves for x and y for any prices and income?arrow_forwardIf the total utilities for the fifth and sixth units of a good consumed are 98 and 115 respectively. The marginal utility for the sixth unit is:arrow_forwardUse the table below to answer the following question. Number of Units A) 95 B) 47.5 190 (D) 90 1 2 3 4 5 5 What is the marginal utility of the second unit? Total Utility 100 190 270 340 400 450arrow_forward
- Question 14: Market pressures continually swing back and forth, driving towards a particular price where the quantity supplied equals the quantity demanded. This point is called A Maximum Supply B Minimum demand C Optimal Utility D Price Equilibriumarrow_forwardThe utility function of a consumer is u = √x + 2y. (a) Calculate how much MRS of that consumer when x = 4. (b) If the consumer currently consumes 4 units of goods x and the price ratio of Px / Py = 1/4, then the consumer should increase or decrease the consumption of goods x?arrow_forwardOptimal consumption refers to Multiple Choice the mix of products that maximizes total utility for the limited amount of income consumers have to spend. the total number of products that maximizes total utility for consumers. the maximum total utility a consumer receives by the consumption of one more item. the amount demanded that will create the strongest economy.arrow_forward
- Utility is a type of function that occurs in economics. When a consumer receives x units of a certain product, a certain amount of pleasure, or utility U, is derived. The graph represents a typical utility function. a) Find the average rate of change of U as x changes from 0 to 1; from 1 to 2; from 2 to 3; from 3 to 4. b) Why do the average rates of change decrease as x increases? a) The average rate of change of U as x changes from 0 to 1 is. (Type an integer or a decimal.) C Utility (pleasure units) AU 200- 150- 100- 50- 0 (1,67) (2,106) I (3,134) (4,156) 2 Number of units of product 4 Xarrow_forwardWhat economic principle suggests that individuals will continue to consume more of a good or service until the marginal benefit equals the marginal cost? A) Law of Demand B) Law of Supply C) Law of Diminishing Marginal Utility D) Equilibrium Pricearrow_forwardFrom the consumer’s viewpoint, which of the following is to get the most total satisfaction or value from the least amount of money spent given the prices of the goods or services faced and the income level of the consumer? Utility maximization Resource maximization Product maximization Profit maximizationarrow_forward
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