Q2. You drink only Coffee or Orange juice Price of Coffee Marginal Utility of Coffee (for (dollars per cup) 1st cup) Price of Orange Marginal Utility Juice (dollars per glass) of Orange Juice (for 1" glass) $3 60 $2 50 a) Calculate the MU per dollar for Coffee b) Calculate the MU per dollar for Orange Juice c) If you have 1 cup of Coffee and 1 glass of Orange juice, are you in Equilibrium? Explain briefly. d) If not, how should you change your consumption of these 2 items?
Q2. You drink only Coffee or Orange juice Price of Coffee Marginal Utility of Coffee (for (dollars per cup) 1st cup) Price of Orange Marginal Utility Juice (dollars per glass) of Orange Juice (for 1" glass) $3 60 $2 50 a) Calculate the MU per dollar for Coffee b) Calculate the MU per dollar for Orange Juice c) If you have 1 cup of Coffee and 1 glass of Orange juice, are you in Equilibrium? Explain briefly. d) If not, how should you change your consumption of these 2 items?
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 8P
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Question
Transcribed Image Text:i) Marginal Utility graphs
Q2. You drink only Coffee or Orange juice
Price of Coffee
Marginal Utility
of Coffee (for
(dollars per cup) 1st cup)
Price of Orange Marginal Utility
Juice (dollars
per glass)
of Orange Juice
(for 1 glass)
$3
60
$2
50
a) Calculate the MU per dollar for Coffee
b) Calculate the MU per dollar for Orange Juice
c) If you have 1 cup of Coffee and 1 glass of Orange juice, are you in Equilibrium? Explain
briefly.
d) If not, how should you change your consumption of these 2 items?
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