Marie has a weekly budget of $24, which she likes to spend on magazines and pies.If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?If the price of a pie is $12, what is the maximum number of pies she could buy in a week?What is Marie’s opportunity cost of purchasing a pie?At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie?Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.

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Answered: Marie has a weekly budget of $24, which…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Marie has a weekly budget of $24, which she likes to spend on magazines and pies.

If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?
If the price of a pie is $12, what is the maximum number of pies she could buy in a week?
What is Marie’s opportunity cost of purchasing a pie?
At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie?
Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.

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At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie?
Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.

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Follow-up Question

At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie?
Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.

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by Bartleby Expert

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