ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6.  Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint?

This table presents data on the utility derived from consuming ramen and steak burritos per week.

**Ramen Consumption:**
- **Ramen per week:** Indicates the number of ramen servings consumed weekly.
- **Total Utility (ramen):** Represents the total satisfaction or utility obtained from consuming ramen.
- **Marginal Utility (ramen):** Shows the additional utility gained from consuming one more serving of ramen.

**Data for Ramen:**
- 0 servings: Total Utility = 0, Marginal Utility = -
- 1 serving: Total Utility = 140, Marginal Utility = 140
- 2 servings: Total Utility = 260, Marginal Utility = 120
- 3 servings: Total Utility = 360, Marginal Utility = 100
- 4 servings: Total Utility = 450, Marginal Utility = 90

**Steak Burrito Consumption:**
- **Steak Burritos per week:** Indicates the number of steak burritos consumed weekly.
- **Total Utility (burritos):** Represents the total satisfaction or utility obtained from consuming burritos.
- **Marginal Utility (burritos):** Shows the additional utility gained from consuming one more burrito.

**Data for Steak Burritos:**
- 0 burritos: Total Utility = 0, Marginal Utility = -
- 1 burrito: Total Utility = 160, Marginal Utility = 160
- 2 burritos: Total Utility = 310, Marginal Utility = 150
- 3 burritos: Total Utility = 410, Marginal Utility = 100
- 4 burritos: Total Utility = 450, Marginal Utility = 40

This data illustrates the concept of diminishing marginal utility, where each additional unit consumed provides a decreasing amount of additional satisfaction.
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Transcribed Image Text:This table presents data on the utility derived from consuming ramen and steak burritos per week. **Ramen Consumption:** - **Ramen per week:** Indicates the number of ramen servings consumed weekly. - **Total Utility (ramen):** Represents the total satisfaction or utility obtained from consuming ramen. - **Marginal Utility (ramen):** Shows the additional utility gained from consuming one more serving of ramen. **Data for Ramen:** - 0 servings: Total Utility = 0, Marginal Utility = - - 1 serving: Total Utility = 140, Marginal Utility = 140 - 2 servings: Total Utility = 260, Marginal Utility = 120 - 3 servings: Total Utility = 360, Marginal Utility = 100 - 4 servings: Total Utility = 450, Marginal Utility = 90 **Steak Burrito Consumption:** - **Steak Burritos per week:** Indicates the number of steak burritos consumed weekly. - **Total Utility (burritos):** Represents the total satisfaction or utility obtained from consuming burritos. - **Marginal Utility (burritos):** Shows the additional utility gained from consuming one more burrito. **Data for Steak Burritos:** - 0 burritos: Total Utility = 0, Marginal Utility = - - 1 burrito: Total Utility = 160, Marginal Utility = 160 - 2 burritos: Total Utility = 310, Marginal Utility = 150 - 3 burritos: Total Utility = 410, Marginal Utility = 100 - 4 burritos: Total Utility = 450, Marginal Utility = 40 This data illustrates the concept of diminishing marginal utility, where each additional unit consumed provides a decreasing amount of additional satisfaction.
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