Handout 2 - Handout 2 1.From the total utility schedule shown below calculate the marginal utility of each additional unit of X consumed Units of X 1 2

Handout 2 - Handout 2 1.From the total utility schedule...

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Handout 2 1.From the total utility schedule shown below, calculate the marginal utility of each additional unit of Xconsumed.Units of X1234567Utility15355062707476772.Suppose a consumer’s utility derived from consuming bananas is described by the function U 103X2– (1/3)X3. Use the derivative formula found in Equation 4A.1 to compute marginal utility.a.Make a table showing marginal utility for Xfrom 1 to 7 units.b.Would this individual ever choose to consume more than 7 units? Explain.3.What information is contained in the slope of an indifference curve? Why are these curves typically convex to the origin?4.For each of the utility functions below, draw a set of indifference curves showing utility levels U12, U 16, and U a.UXYb.UXYc.UXd.What is true about the commodities in (b)?e.What about the commodities in (c)?5.Suppose a consumer has an income of $500 and faces prices pX5 and pZ10.a.Write the equation for the budget constraint.b. 8 X 24. Y
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