Answers to chapter 7 - Solutions to End-of-Chapter...

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Solutions to End-of-Chapter Exercises Chapter 7 [22] Section 7.1 [22.1]: Total and Marginal Utility 1.1 consumption, total utility (measured in 'utils') 1.2 3, less, greater 1.3 up arrow, down arrow 1.4 down arrow, down arrow Section 7.2 [22.2]: Consumer Choice 2.1 down arrow, up arrow, up arrow 2.2 up arrow, down arrow 2.3 up arrow, down arrow, down arrow, up arrow 2.4 \$200/violin 2.5 decrease, increase 2.6 12, increase, decrease 2.7 marginal utility per dollar spent on movies, marginal utility per dollar spent on books 2.8 down arrow, down arrow, up arrow 2.9 Table Entries: 4, 5 a. beverage B b. switch to A 2.10 a. b. Channels – 12.5, 11, 10, 9, 8, 7 Games – 6, 8, 10 12, 18, 24 3 channels and 36 games would be chosen. Special note/errata If you are using the first printing of this book, the table that accompanies Exercise 2.10b looks like this: Quantity Marginal Utility Marginal Utility per Dollar Channels Games Channels Games Channels: Price = \$4 Games Price = \$1 1 44 6 50 2 40 8 44 3 36 10 40 4 32 12 36 5 28 18 32 61

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62 Chapter 7 6 24 24 28 When assigning Exercise 2.10b, under the heading of “Marginal Utility,” switch the numbers that appear under Channels and Games so the table looks like this: Quantity Marginal Utility Marginal Utility per Dollar Channels Games Channels Games Channels: Price = \$4 Games Price = \$1 1 44 50 6 2 40 44 8 3 36 40 10 4 32 36 12 5 28 32 18 6 24 28 24 c. The switch makes you worse off.
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This note was uploaded on 10/25/2009 for the course ECON 81509 taught by Professor X.song during the Spring '09 term at Mesa CC.

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Answers to chapter 7 - Solutions to End-of-Chapter...

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