ERM 501 - Quantity Utility from classical CDs Utility
Question # 00614435
Posted By:
Updated on: 11/07/2017 11:53 AM Due on: 11/07/2017
Mary enjoys classical CDs and travel books and spends a75 a month on them. The following table shows the utility she gets from each good:
Quantity Utility from classical CDs Utility from travel books
1 90 120
2 110 136
3 126 148
4 138 152
5 146 154
aDraw graphs showing Mary's utility from classical CDs and from travel books.
bCompare the two utility graphs. Can you say anything about Mary's preferences?
cDraw graphs that show Mary's marginal utility from classical CDs and from travel books.
dWhat do the two marginal utility graphs tell you about Mary's preferences?
eIf a classical CD and a travel book cost a15 each, how does Mary spend the a75 a month?
-
Rating:
5/
Solution: ERM 501 - Quantity Utility from classical CDs Utility