Question
The following table shows William's total utility from consuming Pita Wraps and Bubble Tea. Pita Wraps...
The following table shows William's total utility from consuming Pita Wraps and Bubble Tea.
|
Pita Wraps |
Bubble Tea |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Suppose William has $30 to spend on Pita Wraps and Bubble Tea. The price of a Pita Wrap is $6; the price of a Bubble Tea is $3.
What is William's optimal consumption bundle?
4 4
Pita Wrap(s) and
2 2
Bubble Tea(s)
Now, suppose the price of a Bubble Tea increases to $6, and the price of a Pita Wrap does not change. Find William's new optimal consumption bundle.
3 3
Pita Wrap(s) and
2 2
Bubble Tea(s)
What are two points on William's demand curve for Bubble Tea?
P1 =
$3 3
Q1 =
2 2
[This is point A on the graph] (2 pts)
P2 =
$6 6
Q2 =
2 2
[This is point B on the graph] (2 pts)
Homework Answers
Answer #1
Q Utility Marginal Utility
(Wraps)
1 72
2 156 84
3 222 66
4 276 54
5 318 42
6 354 36
7 378 24
8 396 18
9 405 9
10 411 6
11 414 3
12 414 0
Q Utility Marginal Utility
(Tea)
1 60
2 126 66
3 180 54
4 230 50
5 276 46
6 318 42
7 354 36
8 372 18
9 381 9
10 387 6
11 390 3
12 390 0
The optimal pointoccurs where ,
Ratio of price = Ratio of marginal utilities.
(i) In the first part, this occurs at Wraps = 2 and Tea = 6 ( where the ratio of their marginal utilities is equal to their price ratio)
(ii) In the second part ( when the price of tea changes) the optimal point occurs at Wraps = 3 and Tea = 2 ( where the ratio of their marginal utilities is equal to their price ratio)
Not the answer you're looking for?
Similar Questions
Quantity of Pita Wraps Marginal Utility Quantity of Bubble Tea Marginal Utility 1 60 1 40...
Quantity of Pita Wraps
Marginal Utility
Quantity of Bubble Tea
Marginal Utility
1
60
1
40
2
42
2
30
3
30
3
21
4
12
4
15
5
0
5
6
6
-6
6
3
7
-10
7
0
Keegan has $30 to spend on Pita Wraps and Bubble Tea. The price
of a Pita Wrap is $6 and the price of a glass of Bubble Tea is $3.
Table 10-1 shows his total utility from different quantities of...
The following table shows William's utility from consuming slices of pizza and cans of Coke. Slices...
The following table shows William's utility from consuming
slices of pizza and cans of Coke.
Slices of
PizzaPizza
Total Utility
from PizzaPizza
Marginal Utility
from Last Slice
Cans of
CokeCoke
Total Utility
from CokeCoke
Marginal Utility
from Last Can
0
0
-
0
-
-
1
36
36
1
30
30
2
66
30
2
55
25
3
90
24
3
75
20
4
108
18
4
90
15
5
120
12
5
100
10
6
126
6
6
105...
The table below shows total utility in utils that a utility maximizing consumer receives from consuming...
The table below shows total utility in utils that a utility
maximizing consumer receives from consuming two goods: Carrots and
Cakes
Carrots Cakes
Quantity Total
Utility Quantity Total
Utility
0 0 0 0
1 20 1 30
2 35 2 50
3 45 3 65
4 50 4 75
5 52 5 80
Assume that Carrots cost 1$ each, Cakes cost $2 each, and the
consumer spends the entire income of $7 on Carrots and Cakes.
a. What is the maximum amount of cakes and carrots that this
person can consume.
i. Cakes: ___________________
ii. Carrots: __________________
b. Determine what level...
This table shows the quantities consumed of one commodity and the total utility gained from this...
This table shows the quantities consumed of one commodity and
the total utility gained from this commodity. Marginal Utility
Total Utility Quantity 9 1 18 2 25 3 30 4 34 5 36 6 36 7 34 8 The
Required: 1. Extract the marginal utility 2. Draw the
total and marginal utility curve in the graph and explain the
importance of marginal utility.
The following table shows Madison's utility from consuming popcorn and Coke. Suppose that Madison has income...
The following table shows Madison's utility from consuming
popcorn and Coke. Suppose that Madison has income of $51 the
price of popcorn is $6 and the price of Coke is $13.50 If
Madison wants to maximize her utility, how much popcorn and Coke
should she buy?
Popcorn
Coke
Quantity
Marginal Utility
Marginal Utility
1
192
144
2
144
108
3
96
72
4
48
36
5
24
18
6
12
9
Madison should buy ___ boxes of popcorn and ____...
10. The Table below shows the Total Utility (TU) and Marginal Utility (MU) derived from the...
10. The Table below shows
the Total Utility (TU) and Marginal Utility (MU) derived from the
consumption of 10 units of the commodities X and Y.
a. Derive a column for the Marginal Utility of x
(MUx), and a column for the Total Utility of y
(TUy).
b. On separate graphs, plot the Total and Marginal curves for each
commodity, placing the panel of the marginal utility curve below
the panel for the total
utility curve for each...
The following table shows Madison's utility LOADING... from consuming popcorn and Coke. Suppose that Madison has...
The following table shows Madison's utility
LOADING...
from consuming popcorn and Coke. Suppose that Madison has income
of
$34.0034.00,
the price of popcorn is
$4.004.00,
and the price of Coke is
$9.009.00.
If Madison wants to maximize her utility, how much popcorn and
Coke should she buy?
Popcorn
Coke
Quantity
Marginal Utility
Marginal Utility
1
192192
144144
2
144144
108108
3
9696
7272
4
4848
3636
5
2424
1818
6
1212
99
Madison should buy
nothing
boxes of popcorn and...
The following table shows Madison's utility... from consuming popcorn and Coke. Suppose that Madison has income...
The following table shows Madison's utility... from consuming
popcorn and Coke. Suppose that Madison has income of $18.00, the
price of popcorn is $6.00, and the price of Coke is $1.50. If
Madison wants to maximize her utility, how much popcorn and Coke
should she buy?
Popcorn Coke
Quantity Marginal Utility Marginal Utility
1 192 144
2 144 108
3 96 72
4 48 36
5 24 18
6 12 9
Madison should buy
?? boxes of popcorn and
??...
1. A consumer has the utility function U = min(2X, 5Y ). The budget constraint isPXX+PYY...
1. A consumer has the utility function U = min(2X, 5Y ). The
budget constraint isPXX+PYY =I.
(a) Given the consumer’s utility function, how does the consumer
view these two goods? In other words, are they perfect substitutes,
perfect complements, or are somewhat substitutable? (2 points)
(b) Solve for the consumer’s demand functions, X∗ and Y ∗. (5
points)
(c) Assume PX = 3, PY = 2, and I = 200. What is the consumer’s
optimal bundle?
(2 points)
2....
The following table shows Ellie's utility from consuming slices of cake and 7-Up Slices of CakeCake...
The following table shows Ellie's utility from consuming slices
of cake and 7-Up
Slices
of
CakeCake
Marginal Utility from Last Slice
Cans
of
7 minus Up7−Up
Marginal Utility from Last Can
0
-
0
-
1
120
1
120
2
100
2
60
3
80
3
45
4
60
4
30
5
40
5
20
6
20
6
15
.
Suppose Ellie has $12 per week to spend on cake and 7−Up and
that the price of a slice of...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 9 minutes ago
asked 15 minutes ago
asked 23 minutes ago
asked 37 minutes ago
asked 40 minutes ago
asked 49 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago