Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 5, Problem 2TY
To determine
Explain greater
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Does the income level of a person change their view of substitute goods?
a)Which gives you greater total utility: 14 gallons of water per day or 22 gallons per day? Why?
b). At which level do you get greater marginal utility: 14 gallons per day or 22 gallons per day? Why?
How can else increase marginal utility and therefore the consumer demand curve?
Chapter 5 Solutions
Economics: Principles & Policy
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Similar questions
- Explain utility and its connection to consumer behaviorarrow_forwardimpacts of marginal utility. Imagine that you are a seller of phones: How can you increase the consumer demand curve by helping increase the marginal utility for consumers? Detail specific steps to take and provide examples.arrow_forwardSuppose John decides to buy 4 units of food and 4 units of clothing with his $12 budget. Would his marginal utility per dollar spent on food be greater than or less than his marginal utility per dollar spent on clothing? What does this tell you about how he should substitute food for clothing if he wanted to increase his utility without spending any more money?arrow_forward
- Ari intends to purchase a new car and has narrowed it down to a Dodge Ram truck or a Toyota Camry. A Dodge Ram truck costs $55000 while a Toyota Camry costs $20000. The utility that Ari will get from Dodge Ram truck is 12500 while Toyota Camry will generate a utility of 2500. Note: A purchase generating utility tells us the marginal utility of the good. What is the Marginal Utility per Dollar for Dodge Ram truck? What is the Marginal Utility per Dollar for Toyota Camry? Will Ari be better off buying a Dodge Ram truck or a Toyota Camry? ODodge Ram truck OToyota Camry Aarrow_forwardhow do I illustrate an increase in a price of an item resulting in consumers buying another itemarrow_forwardState any two reasons for why a consumer buy more at a lower pricearrow_forward
- How can one's choice of purchases/consumption be infuenced by utility or marginal utility?arrow_forwardEconomists assume that consumers choose the best bundle of goods they can afford. True or false?arrow_forwardUsing the consumer choice theory, explain how an individual decides what combination of different products to buy?arrow_forward
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