-1- NAME PART 11 (31 points) . The table below shows the total utility (TU) obta
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Question
-1- NAME PART 11 (31 points) . The table below shows the total utility (TU) obtained by Mary from consuning slices of pizza and cans of soda per one day. (24 points)- PIZZA TU 0 14 26 36 MU MU 10 18 25 28 28 24 19 5 6 48 48 a) Complete the marginal utility (MU) columns in this table. How many slices of pizza and cans of soda should Mary consume if she is attending a party and thus can obtain as many units of these products as she wants for free? Bxplain. $1.50, and the price per can of soda is $0.75. Given this information and that provided in the table, explain whether or not Mary should buy 2 slices of pizza and 1 can of soda. If not, what combination of these products should she purchase? Show all work. b) Suppose that Mary has $3.75 to spend, the price per slice of pizza isExplanation / Answer
Q(a): Marginal Utility has been mentioned below in its respective column using the below farmula -
Marginal Utility (MUnth) = TUn - TUn-1
Mary should consume 6 slices of PIZZA and 5 cans of SODA because total utility is maximum against 6 slices of Pizza and 5 cans of soda.
Lets say each time Mary eats a slice of Pizza and drinks a can of Soda, she feels a certain amount of satisfaction. The second slice of pizza and can of soda bring more satisfaction than the first, and the third slice and can of Soda is more satisfying than the second. However, by the time Mary eats the last slice of pizza, the amount of satisfaction is much less than the first few slices and at last amount of satisfaction becomes zero at a certain point.
So the above table states that Mary is the most satisfying after consuming 6 slices of Pizza and 5 cans of Soda.
Q(b): Lets calulate Marigninal Utiltity in terms of Money (MUm) using the below farmula -
MUm (Pizza) = Marginal Ultility of Pizza / Price of Pizza
MUm (Soda) = Marginal Utility of Soda / Price of Soda
Mary will purchase 2 slices of Pizza and 1 can of soda becase her satisfaction level will maximum than the prices of Pizza and Soda. .
Q Pizza TU MU Q SODA TU MU 0 0 - 0 0 - 1 14 14 1 10 10 2 26 12 2 18 08 3 36 10 3 25 07 4 44 08 4 28 03 5 48 04 5 28 00 6 48 00 6 24 -04 7 44 -04 7 19 -05Related Questions
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