E202ProblemSet3.2

# E202ProblemSet3.2 - maximizing her utility? If so, explain...

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3. Martha’s current marginal utility from consuming orange juice is 75 utils per ounce and her marginal utility from consuming coffee is 50 utils per ounce. If orange juice costs 25 cents per ounce and coffee costs 20 cents per ounce, is Martha maximizing her total utility from the two beverages? If so, explain how you know. If not, how should she rearrange her spending? 5. Sue gets a total of 20 utils per week from her consumption of pizza and a total of 40 utils per week from her consumption of yogurt. The price of pizza is \$1 per slice, the price f yogurt is \$1 per cup, and she consumes 10 slices of pizza and 20 cups of yogurt each week. Is Sue
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Unformatted text preview: maximizing her utility? If so, explain how you know. If not, how should she rearrange her spending? 7. For the demand curve shown, find the total amount of consumer surplus that results in the gasoline market if gasoline sells for \$2 per gallon. Find the total amount of consumer if gasoline sells for \$3 per gallon and the change in consumer surplus. On my honor, as an Aggie, I have neither given nor received unauthorized aid on this assignment. Signature _____________________...
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## This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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