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harina [27]
3 years ago
9

If the price of an apple is $0.50, the marginal utility per dollar spent for the fifth apple is:

Advanced Placement (AP)
1 answer:
lakkis [162]3 years ago
3 0

Complete question :

If the price of an apple is $0.50, the marginal utility per dollar spent for the fifth apple is:

Number of apples ____total utility

2__________________130

3__________________180

4__________________220

5__________________250

6__________________270

7__________________280

Answer:

60

Explanation:

The marginal utility simply refers to the change or extra satisfaction derived with change in consumption.

Hence, the marginal utility of the fifth apple equals :

Difference /change or extra satisfaction derived by consuming one more than 4 apples = (total utility of 5th apple - total utility of 4th apple)

= (250 - 220) = 30

Hence, marginal utility per dollar :

Marginal utility / price per apple

Price per apple = $0.5

Marginal utility of 5th apple = 30

Therefore,

30 / 0.5

= 60

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