Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases. Quantity Price per Download MU per download Music downloads 3 $3 60 Video downloads 2 $3 45 As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. Her available budget was $19.00. Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Total Money Total Budget music mu mu/$ music videos mu mu/$ videos Spent Remaining 1st ? ? $3.00 1st ? ? $3.00 $6.00 $13.00 2nd ? ? 2nd 45 15 $3.00 $12.00 $7.00 3rd 60 20 $3.00 3rd $15.00 $4.00 4th 4th Total money spent on music: $9.00 Total money spent on videos: $6.00 Total money spent: $15.00 Total budget remaining: $4.00 A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is Matilda maximizing her utility? Explain your answer. Should Matilda consume one more video download, to move her closer to her optimum utility? Explain your answer. Should Matilda consume one less music download and one more video download, to move her closer to her optimum utility? Explain your answer. Should Matilda consume one more music download, to move her closer to her optimum utility? Explain your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases.

	Quantity	Price per Download	MU per download
Music downloads	3	$3	60
Video downloads	2	$3	45

As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. Her available budget was $19.00.

Downloads of	mu (score) from 1 to 100	Price of each $3.00	Money spent on	Downloads of	mu (score) from 1 to 100	Price of each $3.00	Money spent on	Total Money	Total Budget
music	mu	mu/$	music	videos	mu	mu/$	videos	Spent	Remaining
1st	?	?	$3.00	1st	?	?	$3.00	$6.00	$13.00
2nd	?	?		2nd	45	15	$3.00	$12.00	$7.00
3rd	60	20	$3.00	3rd				$15.00	$4.00
4th				4th

Total money spent on music: $9.00

Total money spent on videos: $6.00

Total money spent: $15.00

Total budget remaining: $4.00

A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is Matilda maximizing her utility? Explain your answer.

Should Matilda consume one more video download, to move her closer to her optimum utility? Explain your answer.

Should Matilda consume one less music download and one more video download, to move her closer to her optimum utility? Explain your answer.

Should Matilda consume one more music download, to move her closer to her optimum utility? Explain your answer.

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