ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Tom likes to collect Batman and Superman comic books. The table below presents his total and marginal utilities for both types of comic books.

 

Instructions: Be sure to scroll down and answer all questions. Enter your answers as a whole number.

 

Batman Comics, Superman Comics, and Tom's Utility

Batman Comic Books   Superman Comic Books
Quantity Total Utility Marginal Utility   Quantity Total Utility Marginal Utility
0 0   0 0
1 40 40   1 58 58
2 68 28   2 92 34
3 88 20   3 106 14
4 94 6   4 110 4
5 94 0   5 112 2
6 84 –10   6 112 0
7 64 –20   7 104 –8

 

a. Assume the price of a Batman comic book is $1, and the price of a Superman comic book is $2. Fill in the values for the marginal utility per dollar for Batman and Superman comic books in the table below.

 

Batman Comics, Superman Comics, and Tom's Marginal Utility per Dollar

Batman Comic Books   Superman Comic Books
Quantity Marginal Utility per Dollar   Quantity Marginal Utility per Dollar
0   0
1     1  
2     2  
3     3  
4     4  
5     5  
6     6  
7     7  

 

b. Suppose Tom has $5 to spend on Batman and Superman comic books (nothing else matters to Tom). If Tom wants to maximize his utility, how many of each should he buy?

 

     (Click to select)   0   1   2   3   4   5  Batman comic book(s) and   (Click to select)   0   1   2   3   4   5  Superman comic book(s)

 

c. Now suppose Tom has $10 to spend on Batman and Superman comic books (nothing else matters to Tom). If Tom wants to maximize his utility, how many of each should he buy?

 

       (Click to select)   0   1   2   3   4   5  Batman comic book(s) and   (Click to select)   0   1   2   3   4   5  Superman comic book(s)

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