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Alja [10]
3 years ago
8

The marginal utility for the third unit of X is 63 utils, and the marginal utility for the fourth unit of X is 56 utils. Assume

that, in this case, utility can only take on whole number, integer, values measured in utils.
If the law of diminishing marginal utility holds, the minimum total utility of consuming four units of X is_______ utils.
Business
1 answer:
borishaifa [10]3 years ago
8 0

Answer:

248 UTILS

Explanation:

Total Utility is the total satisfaction from consumption of all units of a good.

Marginal Utility is the additional satisfaction from consuming an additional unit of a good.

TU = ΣMU ; MU = TUn - TUn-1

Law of Diminishing Marginal Utility states : A good's units of consumption increase makes it additional satisfaction i.e MU to rise lesser in the successive unit than in the preceding one. Eg - A thirsty person will get higher satisfaction from the 1st glass of water than the 2nd glass.

If the case gIven follows Law of DMU : (Given- [email protected] unit < [email protected] unit) i.e (56<63) ; Following must would have been the case :

[email protected] unit > [email protected] unit > [email protected] unit - First two MUs would at least be 65, 64 (least possible whole no. integer values > 63).

So , Minimum TU (1..4) = ΣMU = 65 + 64 + 63 + 56 = 248 utils

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Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced a
allsm [11]

Answer:

Option A, buy less of X and more of Y is correct.

Explanation:

The amount that Mr. Rational is going to spend = $27

Quantity of good X = 5 units

Price of good X (Px) = $3 per unit

Marginal utility of 5th unit of X (MUx) = 30

Quantity of good Y = 6 units

Price of good Y (Py) = $2 per unit

Marginal utility of 6th unit of Y (MUy) = 18

Now \ find \  \frac{MUx}{Px} = \frac{30}{3} = 10 \\

Now \  \frac{MUy}{Py} = \frac{18}{2} = 9

Since \ the  \ \frac{MUx}{Px} is \ greater \ than \  \frac{MUy}{Py}.

So good x will be substituted for y in order to reach the consumer equilibrium.

\frac{MUx}{Px} =  \frac{MUy}{Py}

Thus, Option a. buy less of X and more of Y is correct.

4 0
3 years ago
A country has passed a law setting a minimum wage for factory workers 5% below the equilibrium price. How will this law impact t
ella [17]

Answer:

C.) The law will have no impact on the market.

Explanation:

The minimum wage refers that the producers could charge high amount as compared with the wages i.e. minimum also the equilibrium wage would be more than the minimum wage so this represents that the market is an equilibrium point and hence there is no impact on the market

Therefore the option C is correct

And, hence all the other options are wrong

6 0
3 years ago
Which of the following statements regarding uncertainty in liabilities is not correct? Group of answer choices Liabilities can i
nadya68 [22]

Answer: A company can only record a liability when it knows whom to pay, when to pay, and how much to pay

Explanation:

A liability is simply defined as the amount that a particular company owes. Liabilities consist of loans, accrued expenses, defered revenue, and accounts payable.

We should note that liabilities can involve uncertainty in whom to pay. Also, a company can have an obligation of a known amount to a known creditor, but not know when it must be paid.

Based on the options given in the question, the answer will be "a company can only record a liability when it knows whom to pay, when to pay, and how much to pay".

5 0
3 years ago
During the last few years we have seen a rise in the production of natural gas in the United States. This lead to a decline in t
antoniya [11.8K]

Answer: The correct answer is "B. The quantity demanded of oil decreased".

Explanation: The statement "B. The quantity demanded of oil decreased" is incorrect in describing this scenario because a change in the quantity demanded would be caused by a change in the price, in this case the price of oil remained more or less the same, therefore the change is in demand, and is produced at the price of a substitute good (natural gas) low.

5 0
3 years ago
In hopes of earning a few dollars on belongings they no longer use or want, some people take their household items to consignmen
Diano4ka-milaya [45]

Answer:

Selling through a consignment shop

Explanation:

Structural holes refer to a situation in which parties in a network are not able to interact.

A consigment shop is a store where you can take things to sell and the owner decides a price to pay and then, the objects are sold to someone else at a higher price and the owner gets a profit.

eBay is an online shopping site that allows people to sell things directly to buyers.

According to this, the answer is that the method of selling that can be argued to have more structural holes is selling through a consignment shop because buyers can't negotiate directly with the sellers which they can do in eBay.

5 0
3 years ago
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