Solution to homework 4

Solution to homework 4 - Econ 200 Autumn 2007 Ohio State...

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Econ 200 Autumn 2007 Ohio State University Homework Four Suggested Solution Chapter 7, pp169: # 4 (2+1+2+1+2) 4. a. To draw a graph of Jason’s total utility from DVDs, plot the number of DVDs on the x -axis and Jason’s utility from DVDs on the y -axis. The curve will look similar to Fig. 7.3(a). To draw a graph of Jason's total utility from spy novels, repeat the above procedure but use the spy novel data. b. Jason gets more utility from any number of DVDs than he does from the same number of spy novels. c. To draw a graph of Jason’s marginal utility from DVDs plot the number of DVDs on the x -axis and Jason’s marginal utility from DVDs on the y -axis. The curve will look similar to Fig. 7.3(b). To draw a graph of Jason’s marginal utility from spy novels, repeat the above procedure but use the spy novel data. Jason’s marginal utility from DVDs is the increase in total utility he gets from one additional DVD. Similarly, Jason’s marginal utility from spy novels is the increase in total utility he gets from one additional spy novel. d. Jason gets more marginal utility from an additional DVD than he gets from an additional spy novel when he has the same number of each. e. Jason buys 2 DVDs and 2 spy novels. When Jason buys 2 DVDs and 2 spy novels he spends $60. Jason maximizes his utility when he spends all of his money and the marginal utility per dollar spent on DVDs and spy novels is the same. When Jason buys 2 DVDs his marginal utility per dollar spent is 2.5 units per dollar and when Jason buys 2 spy novels his marginal
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This test prep was uploaded on 04/19/2008 for the course ECON 200 taught by Professor Newton during the Spring '08 term at Ohio State.

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Solution to homework 4 - Econ 200 Autumn 2007 Ohio State...

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