Does a dollar given to a rich person raise the rich person’s total utility more than a dollar given to a poor person raises the poor person’s total utility?
Does a dollar given to a rich person raise the rich person’s total utility more than a dollar given to a poor person raises the poor person’s total utility?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 3SQP
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1. Does a dollar given to a rich person raise the rich person’s total utility more than a dollar given
to a poor person raises the poor person’s total utility?
2. This week you have gone to two parties. Assume the total utility you gained from these parties
is 100 utils. Then you go to a third party, and your total utility rises to 110 utils. What is the
marginal utility of the third party attended per week? Given the law of diminishing marginal
utility, what will happen to total utility and marginal utility when you go to a third party this
week?
3. Suppose you consume 3 pounds of beef and 5 pounds of pork per month. The price of beef is
$1.50 per pound, and pork is $2.00 per pound. Assuming you have studied economics and
achieved consumer equilibrium, what is the ratio of the marginal utility of beef for the marginal
utility of pork?
4. Explain the relationship between the law of diminishing marginal utility and the law of
demand .
5. Using the marginal utility schedule in question 8, begin in consumer equilibrium and assume
the price per hamburger meal falls from $5 to $2, all other factors held constant. What is the total
utility realized?
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