18e_Key_Question_Answers_Ch_7

18e_Key_Question_Answers_Ch_7 - 7-1(Key Question Complete...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 7-1(Key Question) Complete the following table and answer the questions below:Units consumedTotal utilityMarginal utility12345610___2530___34108______3___a.At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?b.“A rational consumer will purchase only 1 unit of the product represented by these data, since that amount maximizes marginal utility.” Do you agree? Explain why or why not.c.“It is possible that a rational consumer will not purchase any units of the product represented by these data.” Do you agree? Explain why or why not.Missing total utility data top – bottom: 18; 33. Missing marginal utility data, top – bottom: 7; 5; 1.(a) A decreasing rate; because marginal utility is declining.(b) Disagree. The marginal utility of a unit beyond the first may be sufficiently great (relative to product price) to make it a worthwhile purchase. Consumers are interested in maximizing totalutility, not marginal utility....
View Full Document

This note was uploaded on 05/23/2010 for the course ECON 101 taught by Professor Keep during the Spring '10 term at Glendale Community College.

Page1 / 2

18e_Key_Question_Answers_Ch_7 - 7-1(Key Question Complete...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online