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# Jennifer is planning a party. She has a budget of \$30.00 and wants to buy Pepsi and Pizza. She sees that the price of Pepsi is \$4.00 per 24 pack and...

I have 16questions of Microeconomic problems.

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Jennifer is planning a party. She has a budget of \$30.00 and wants to buy Pepsi and Pizza. She sees that the price of Pepsi is \$4.00 per 24 pack and the price of each pizza is \$6.00. Jennifer has provided you with the following information in the tables below. Pepsi Quantity Total Utility Marginal Utility MU/Price of Pepsi 1 280 280 2 460 3 120 4 70 5 690 6 720 Pizza Quantity Total Utility Marginal Utility MU/Price of Pizza 1 320 2 560 3 180 4 865 5 945 6 40 1. Complete the above tables 2. Do both goods follow the law of diminishing marginal utility? 3. How many units of Pepsi and Pizza should Jennifer buy if she wants to maximize her utility? 4. What is her total utility from this bundle? 5. Now the price of Pepsi decreases to \$2.00 a 24 pack and the price of Pizza decreases to \$4.00 each. Jennifer still has \$30.00 to spend. How many units of Pepsi and Pizza should she buy if she wants to maximize her utility? 6. What is her total utility from this bundle? 7. Draw Jennifer’s demand curve for Pepsi. 8. Draw Jennifer’s demand curve for Pizza. 9. The _________________is an artificial unit by which utility is measured.
10. The change in total utility due to a one-unit change in quantity consumed is called _____________________. 11. __________________analysis is the study of what happens when small changes take place relative to the status quo. 12. If marginal utility is positive, total utility must _____________; if marginal utility is negative, total utility must _________; if marginal utility falls (but is positive) then total utility must _________________at a decreasing rate. 13. Economists maintain that as more of a good or service is consumed, per unit of time, the marginal benefit ___________; therefore before buyers will purchase more and more of a good, its price must ____________. 14. Mary is in equilibrium. The MUa =6, MUb =12, Pa=2, what is the price of b? 15. Zach is in equilibrium. The MUa=2, MUb=8, what is the price of a in terms of the price of b? 16. What is the utility maximizing condition?

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Jennifer is planning a party. She has a budget of \$30.00 and wants to buy Pepsi
and Pizza. She sees that the price of Pepsi is \$4.00 per 24 pack and the price of
each pizza is \$6.00. Jennifer has...

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