Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
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 and Policy (MindTap Course List)
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- 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_forwardAri 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_forward
- Using the consumer choice theory, explain how an individual decides what combination of different products to buy?arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forwardHow do your total and marginal utility change as you stay at home watching the same TV show (not necessarily the same episode) alone all day?arrow_forward
- Would you expect total utility to rise or fall with additional consumption of a good? Why?arrow_forwardou are having lunch at an all-you-can-eat buffet. If you are rational, what should be your marginal utility from the last morsel of food you swallow?Marginal utility from the last morsel of food you swallow should be .arrow_forwardUsing the consumer choice theory, explain how an individual decides how to adjust her preferred combination of different products to buy when the price of just one product changes ?arrow_forward
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