Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Newspaper vending machines are designed so that once you have paid for one paper; you have access to all the papers in the machine and could take multiple papers at a time. However, other vending machines dispense only one item (the item you bought). You do not have access to all the goods (sodas, candy, snacks, etc.) at one time.

1. Using the concept of marginal utility, describe why these vending machines differ?

Amy is shopping at a dollar store. She is currently buying 5 bracelets that cost $1 each and 4 sodas that cost $1 each. The table below indicates the marginal utility she obtains when she purchases this combination.
Quantity Price per Unit MU per unit
Bracelets 5 $1 30
Sodas 4 $1 40

2. A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is this consumer maximizing her utility?

3. If not, should she consume more bracelets or more sodas? describe.

Answer the following assuming that one more bracelet is purchased and one less soda is consumed:
4. Recall the law of diminishing marginal utility. What happens to the Marginal Utility of bracelets and the Marginal Utility of soda?
5. What happens to the Total Utility received?
6. What happens to the total dollars spent?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M924429

Have any Question? 


Related Questions in Basic Finance

In the presence process arsine and trimethylgallium vapors

In the presence process, arsine and trimethylgallium vapors are diluted in hydrogen gas and fed to the horizontal CVD reactor shown in Figure 30.2. The composition of arsine and trimethylgallium in the feed gas are both ...

Toynbspcorpnbspis analyzing its optimal capital structure

Toy Corp. is analyzing its optimal capital structure. Currently, Toy's capital structure includes 10% debt and the company is planning to triple (3x) its debt capitalization.  Assume that the current risk-free rate is 3. ...

Abc company claims that the proportion of its employees

ABC Company claims that the proportion of its employees investing in individual investment accounts is higher than national proportion of 50%. A survey of 100 employees in ABC Company indicated that 58 of them have inves ...

Investment analysis and taxation of income propertiesa

Investment Analysis and Taxation of Income Properties A property produces a first year NOI of $100,000 which is expected to grow by 2% per year. If the property is expected to be sold in year 10, what is the expected sal ...

How much distress or pain may researchers inflict on

How much distress or pain may researchers inflict on participants who freely agree to participate in a study after being fully informed about the pain or distress they will experience?

Hello kitty company claims that the proportion of its

Hello Kitty Company claims that the proportion of its employees investing in individual investment accounts is higher than national proportion of 50%. A survey of 100 employees in Hello Kitty Company indicated that 58 of ...

1 how would stephanies money management decisions be

1. How would Stephanie's money management decisions be different if she were a single mother of two children? 2. How would Stephanie's money management decisions be affected if she were 35 years old? If she were 50 years ...

Applicationgame user surveyyour game company recently

Application Game User Survey Your game company recently released a new game. You want to find out more about those playing the game. You are interested in information about how much and why they play as well as in knowin ...

The frequency range for a telephone is between 500 hz and

The frequency range for a telephone is between 500 Hz and 4000 Hz. Why does a telephone not do a very good job of transmitting music?

As a new junior analyst for a large brokerage firm you are

As a new junior analyst for a large brokerage firm, you are anxious to demonstrate theskills you learned in college and prove that you are worth your attractive salary. Your firstassignment is to analyze the stock of Gen ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro