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6 Oct 2020
What is the definition of marginal utility per dollar in economics?
What is the definition of marginal utility per dollar in economics?
Sonia DhawanLv10
21 Oct 2020
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Answer the following questions that cover Consumer Choice. Where possible, complete the missing cells in the table below:
|
# of Hot Dogs |
Total Utility of hot dogs | Marginal Utility of hot dogs | Scoops of ice cream | Total Utility of ice cream | Marginal utility of ice cream |
| 0 | 0 | 0 | 0 | ||
| 1 | 10 | 1 | 10 | ||
| 2 | 18 | 2 | 5 | ||
| 3 | 6 | 3 | 4 | ||
| 4 | 4 | 4 | 20 | ||
| 5 | 2 | 5 | 20 |
Suppose Hot Dogs cost $2.50 and a scoop of ice cream costs $1.50, calculate the Marginal Utility per Dollar Spent for each item:
| Hot dogs | Ice cream | |
| Purchase | Marginal Utility per dollar spent | Marginal utility per dollar spent |
| 0 | ||
| 1 | ||
| 2 | ||
| 3 | ||
| 4 | ||
| 5 |
Given that your weekly allowance is only $10.50, what is your optimum consumption of both hot dogs and ice cream? Fill out the table below:
| Hot dogs | Ice cream | |||||
| Purchases | units | Marginal units per dollar spent | Units | Marginal Units per dollar spent | Buying decision | Remaining Income |
| 0 | ||||||
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 |
