Find out the marginal utility for each chicken piece. what, Ask an Expert

Economics

Consumer Choice Theory: Marginal Utility of Chicken Pieces

The table below shows the maximum amount of money you would be willing to pay for increasing numbers of chicken pieces at Fastfood:

Chicken Pieces Maximum Payment

1 $2.00
2 3.80
3 5.40
4 6.80
5 8.00
6 9.00
7 9.80
8 10.40
9 10.80
10 11.00
11 11.00

a) Find the marginal utility for each chicken piece. What is the meaning of the marginal utility of the 11th piece?

b) If the price of chicken pieces is $1.25 each, how many will you buy?

c) If the price falls to $.50, how many will you buy? Explain carefully why you will not buy one more.

d) What is the consumer surplus, or net benefit, that you get from purchasing chicken pieces at $.50?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9206701

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