Question

Ricardo likes to rent DVDs and attend concerts. The DVDs cost $4 and the concerts cost...

Ricardo likes to rent DVDs and attend concerts. The DVDs cost $4 and the concerts cost $40. Ricardo's marginal utility from the last DVD is 20 units. Ricardo is maximizing his utility. What is his marginal utility from the last concert he attended?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

DVD cost: $ 4 per unit

Converts cost: $40

Marginal utility of last unit of DVD: 20 units

Marginal utility per $ from last unit of DVD (20/4) = 5

As the consumer is maximizing his utility, therefore, marginal utility per $ received from last unit of convert is same as that of marginal utility per $ of DVD.

Marginal utility per $ from last unit of convert: 5

Cost per unit of convert: $40

Therefore, Marginal utility derived from lasst unit of convert is (5*$40)= 200

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The table below show the marginal utility, measured in utils, that Ricardo would get by purchasing...
The table below show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has a budget of $106. Quantity of A MU of A Quantity of B MU of B Quantity of C MU of C Quantity of...
The price of paint is $2.00 per tube and the cost of canvas is $3.00 per...
The price of paint is $2.00 per tube and the cost of canvas is $3.00 per sheet. Mr. Ross gets 10 utils from his last tube of paint and $12 utils from his last sheet of canvas. He currently is spending his entire art budget. To maximize utility what should Mr. Ross do? Buy less paint and more canvas Buy more paint and less canvas Nothing, he is already maximizing utility Buy more paint and more canvas
8.) Suppose output = 100 units, fixed cost = $300, total cost = $800, and marginal...
8.) Suppose output = 100 units, fixed cost = $300, total cost = $800, and marginal cost = $60. What is the firm’s total variable cost? $360 $500 $6000 9. ) Which of the following always increases when output increases? Average fixed costs Variable costs Marginal costs 10. ) At levels of output where the firm’s short-run average total cost curve is rising, the marginal cost curve is above the short-run average total cost curve the marginal cost curve is...
4. Apples cost $30 per bushel, and hay costs $10 per bushel. At Mr. Ed’s current...
4. Apples cost $30 per bushel, and hay costs $10 per bushel. At Mr. Ed’s current level of consumption, his marginal rate of substitution of apples for hay (MRSAH) is 1. Assume that his indifference curves have the “standard” curved shape. (3 points each) a. Is Mr. Ed maximizing his utility? Explain why or why not. b. If not, is he buying too many apples or too much hay? Explain.
16 Not yet answered Marked out of 1.00 Flag question Question text If a firm is...
16 Not yet answered Marked out of 1.00 Flag question Question text If a firm is producing at an output level where the total revenue curve intersects the total cost curve, which of the following is true of the firm?​ Select one: a. ​Its cost is maximized. b. ​Its profit is maximized. c. ​Its profit is zero. d. ​Its cost is minimized. e. ​Its revenue is maximized. Question 17 Not yet answered Marked out of 1.00 Flag question Question text...
As Shaniq drinks additional cups of tea at breakfast, Shaniq's Question 1 options: marginal utility from...
As Shaniq drinks additional cups of tea at breakfast, Shaniq's Question 1 options: marginal utility from tea decreases. total utility from tea increases. total utility from tea decreases. Both answers A and B are correct. Both answers B and C are correct. Question 2 (1 point) You can use marginal utility theory to find the demand curve by changing Question 2 options: only the price of one good. only income. only the prices of both goods. the utility schedule. Question...
Brenda likes Coca-Cola and Hot dogs. Coca-Cola cost $4 per bottle and Hot dogs cost $2...
Brenda likes Coca-Cola and Hot dogs. Coca-Cola cost $4 per bottle and Hot dogs cost $2 each. There is a special promotion for Coke that will last for one month. If Brenda sends in the bottle tops from the Cokes she drinks during the next month, she will get a refund of $2 for every bottlecap beyond the first 40 that she returns. For example, if she returns 45 bottle caps she will get back $10 = $2(45 − 40)....
2. If times are bad, Dave’s consulting business earns a profit of $20,000 while if times...
2. If times are bad, Dave’s consulting business earns a profit of $20,000 while if times are good his business earns a profit of $120,000. Dave’s total utility from a profit of $20,000 is 40 units and his total utility from a profit of $120,000 is 60 units. a. If the probability of bad times is 50% and the probability of good times is 50%, what are Dave’s expected profit and his expected utility? b. If the probability of bad...
Assume that Ali is the only fisherman in the village. The marginal cost of catching the...
Assume that Ali is the only fisherman in the village. The marginal cost of catching the first fish is 10,the second is 15, and the marginal cost remains constant at 20 for all fish afterwards. Berk is the only person who likes fish from the village. Assume his willingness to pay for the first fish is 40, 35 for the second fish, and 26 for the third and 0 for all fish afterwards. What is producer surplus if Ali sells...
Q5. Summit has $ 90 with him. He intends to purchase goods X and Y with...
Q5. Summit has $ 90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is $10. The marginal utility schedule of goods X and Y is given below.      Units of     Commodity                 MUx                    MUy            1                  80                      40            2                  72                      32            3                  64                      24            4                  56                      20            5                  48                      16           ...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT