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econ 203 assignment 1

econ 203 assignment 1 - 3 Shirts = $15 MU = 120 Slacks =...

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Econ 203 Assignment #1 Jared Kass 1. Marginal Utility for the third candy bar. MU = ∆U/∆Q MU = 12/1 In the context of this problem there is a diminishing marginal utility. As the amount of candy bars one eats increases the utility they receive from that candy bar decreases. So in this problem the MU for the third candy bar is 12 and the fourth is 7, the fifth is 3, so that just shows how the marginal utility is diminishing. As for ceteris paribus in the context of this problem is meaning that everything else is constant, so for example this person who is eating candy bars is not having anything else affect the amount of utility that he is in taking. 2. Production of Ice Cream Cones. Marginal Product of the fourth worker: MP N = ΔQ/ΔN MP 4 = 10/1 An example of Physical Capital for this firms production would be the machines that are necessary to get the proper amount of ice cream produced per amount of labor.
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Unformatted text preview: 3. Shirts = $15 MU = 120 Slacks = $40 MU = 160 No your will not maximize your utility unless the marginal utility is equal to zero. In order to get to 0 for a marginal utility you will need to purchase more shirts and/or slacks until the Utility does not increase. There is no way to determine exactly how many shirts or slacks would need to be purchased with the information given, but that is how it would be accomplished. 4. Choosing to embrace religion as the promise of an afterlife is infact rational according to the economic definition. Rational economics is basically your actions reflect achieving an underlying goal. Of course if someone has bad actions and still think that they will get into heaven or whatever the example is it might not be rational, but as long as the actions they do are in concordance with reaching an underlying goal, it is economically rational....
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