need help.. Microccom TFTS tElasticity 22. When total utility is at a maximum, m
ID: 1139740 • Letter: N
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Microccom TFTS tElasticity 22. When total utility is at a maximum, marginal utility is: A) B) C) D) rising. at its average value. at a maximum. zero. 23. The law of diminishing marginal utility: A) B) C) D) Table: Utility II refers to the tendency of total utility to increase until an individual's budget is no longer constrained. refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases. indicates that, if a good is inferior, less of it will be purchased when income falls during a period. assumes all goods are normal. Units Total Utility0 10 25 35 60 60 35 25 24. Find the marginal utility for the second unit above: A) 35. ) 15. C) 10 D) 5. 25. The marginal utility for the sixth unit above is: A) -25 B) 0. C) 25. D) -15. 26. Total utility above is maximized at the unit. A) first B) second C) fourth D) sixth 27. Marginal utility above is zero for the unit. A) first B) second C) third D) fifth 28. Marginal utility first becomes negative with theunit above. A) first B) second C) fifth D) sixthExplanation / Answer
Q22 MU is zero when TU is maximum as MRis derivative of TR which needs to be zero for maximizing it.
Q23 This law explains that MU falls as we increase the consumption as the consumer will get less satisfaction aster consuming high amount of it
Q24 , 15 is the MR got by deducting TU of 2nd with TU of 1st
Q25, -25 is the MR got by the same method
Q26 at fourth the TU is maximum i.e. it is 60
Q27 fifth quantity have MU = 0 as TU of 5th - TU of 4th is zero
Q28 for the sixth quantity MU is -ve for the first time got by same method
Q14 price is inelastic that is changing price will not change quantity by that proportion, so if price is increased by 1 then quantity will decrease by less than 1 unit that is revenue will rise in that case
Q7 Price ceiling that is the maximum price that a firm can charge set by govt to restrict firm from charging high prices. So they will be at price 55, this is so because if price ceiling is applied at price above the Equilibrium price at which the good is actually sold then there is no need for the restriction as people will get it for lesser price. So it will be always applies at pirce less than Equlibrim price
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