AGRI 03382 Study Guide - Quiz Guide: Syringa Reticulata, Syringa Vulgaris, Spiraea
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- Consumer Behavior and Utility (10pts): Below is a table showing the total utility Kim would get for consumption of various amounts (units) of three products: toy planes, trains, and automobiles. Assume that the prices are $10, $15, and $5 respectively, and Kim has an income of $160.
| Planes (price = $10) | Trains (Price = $15) | Automobiles (price = $5) | |||||||||||
| Units | Total utility (TU) | Marg. Utility (MU) | MU per dollar | Units | Total utility (TU) | Marg. Utility (MU) | MU per dollar | Units | Total utility (TU) | Marg. Utility (MU) | MU per dollar | ||
| 0 | 0 | -- | -- | 0 | 0 | -- | -- | 0 | 0 | -- | -- | ||
| 1 | 100 | 1 | 300 | 1 | 60 | ||||||||
| 2 | 190 | 2 | 540 | 2 | 110 | ||||||||
| 3 | 270 | 3 | 720 | 3 | 150 | ||||||||
| 4 | 340 | 4 | 870 | 4 | 180 | ||||||||
| 5 | 400 | 5 | 990 | 5 | 205 | ||||||||
| 6 | 450 | 6 | 1080 | 6 | 225 | ||||||||
| 7 | 490 | 7 | 1140 | 7 | 235 | ||||||||
| 8 | 510 | 8 | 1170 | 8 | 240 | ||||||||
Please answer the following questions. You must show all of your work where calculations are required:
a.Fill in the columns for MU and MU/P for each of the three goods to complete the table above (6pts)
b.What is the combination of planes, trains, and automobiles Kim should choose in order to maximize her total utility? How do you know this is the utility maximizing combination? Include a brief explanation of 25 words to receive full credit. (2pts)
c.Calculate Kim
