d) Cardinal Utility (Discuss why this is rarely used) e) Monotonic Transformation (example below) f) Necessary good g)Luxury good h) Giffen goods
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- 24. What is the difference between total utility and marginal utility? Explain.Five consumers have the following marginal utility of apples and pears The price of an apple is $1, and the price of a pear is $2.Which, if any, of these consumers are optimizing over their choice of fruit? For those who are not, how should they change their spending?The following table shows the total utility gained from the consumption of Fanta Lemon in a week. Quantity 1 2 3 4 5 6 7 Total utility 20 35 45 53 58 58 48 (i) Calculate the marginal utility. What do you observe? (ii) Sketch the total utility and marginal utility curves. (iii) If the price of Fanta Lemon increases from `Rs.8 to `Rs.10, how will it affect its consumption? Explain your answer using the data above.
- Calculate 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 : NumberAccording to the law of diminishing marginal utility, marginal utility of a good declines as more of it is consumed in a given time period. According to this law, which of the following statement is true? a. The more I go to school, the more I want to do something else b. Since we need gasoline more than we need paper, gasoline is more valuable c. Peas give me no satisfaction, so I won't buy any d. The more coffee I drink, the more I want to drinkState and explain the law of diminishing marginal utility .Why does the law operate ?
- The principle of diminishing marginal utility says that people don't enjoy consuming more of a good. True or False and Explain the choiceThe table below represents how Marco feels about chocolate candy bars. a. Fill in the missing values for total utility and marginal utility. Instructions: Enter your answers as a whole number. Chocolate Candy Bars and Marco's Utility Chocolate Candy Total Utility Bars (utils) 0 0 1 27 2 3 4 5 6 (Click to select) 60 ♦ 76 Marginal Utility (utils) 27 19 Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda, which gives him 28 utils of happiness, or two additional candy bars. b. Which is he likely to prefer? 6 1b. The table below shows the total utility associated with the consumption of units of ice cream. Fill in the table by finding the marginal utility for each row: a=35 b- 17.5 <= 10.5 d-8.75 e= -7 Show hint Quantity Total Utility Merginal Utility 1 Does this problem demonierate diminishing marginal utility? A. No B. Yes 2 3 4 5 6 160 195 2125 223 231.75 238.75 4 b C d
- Choose the best answer using the utility chart below.  What is the total utility for five snow cones? A. 50 B. 60 C. 45 D. 75What is the marginal utility per dollar spent on the 6th strawberry? Which of the combinations of strawberries and apples satisfies the following rule? How do you know?Let us consider the case of Saiful who derives positive marginal utility from consuming apples. In the initial situation, Saiful consumed 3 apples per week. Now Saiful decides to consume 2 apples per week. What will be the effect of Saiful's decision of consuming 2 apples per week on his total utility and marginal utility? A. Total utility will increase and marginal utility will increase compared to the initial situation B. Total utility will decrease and marginal utility will increase compared to the initial situation C. Total utility will increase and marginal utility will decrease compared to the initial situation D. Total utility will decrease and marginal utility will decrease compared to the initial situation
