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Every​ day, Josie buys 1 bottle of water and 1 salad for lunch. The price of a bottle of water is ​$1.25 and the price of a salad is ​$3.75. Josie's choice of lunch maximizes her total​ utility, and she spends only ​$5.00 on lunch. What do we know about Josie's marginal utility from bottled water​?

0.333 times her marginal utility from salad

Tim buys 7 smoothies and sees 6 movies a week when he has ​$111 to​ spend, the price of a movie is ​$15​, and the price of a smoothie is ​$3. What is the relative price of a movie ticket​? If the price of a movie ticket falls to ​$7.50​, how do Tim's consumption possibilities​ change? The relative price of a movie ticket is​ _______. If the price of a movie ticket falls to ​$7.50​, Tim's consumption possibilities​ _______.

5 smoothies; expand

Nick has ​$24.00 a week to spend on cookies and donuts. The price of a bag of cookies is ​$2.00 and the price of a box of donuts is ​$1.00. Can Nick afford to buy 12 boxes of donuts and 4 bags of cookies​? Can Nick afford to buy 16 boxes of donuts and 6 bags of cookies​? What is the relative price of a bag of cookies​? Draw Nick's budget line and label it.

GRAPH POINT RISE OVER RUN (0,12)to(24,0) - the graph line should be going down hills QUANTIty or y axis -12 to 0 Nick can afford to buy 12 boxes of donuts and 4 bags of cookies. TRUE Nick can afford to buy 16 boxes of donuts and 6 bags of cookies. FALSE The relative price of a bag of cookies is 2 boxes of donuts

Roger has ​$12.00 a week to spend on cookies and donuts. The price of a bag of cookies is ​$2.00​, the price of a box of donuts is ​$1.00. Suppose the price of a box of donuts remains at ​$1.00 but the price of a bag of cookies rises to ​$3.00. Draw Roger's budget line after the price rise. Label it.

GRAPH POINT ((0,4) to (0,12) NEE BUDGET LINE If Roger buys 6 boxes of donuts​, what is the maximum number of bags of cookies he can buy after the price of a bag of cookies rises to ​$3.00​? Roger can buy 2 bags of cookies a week. Has the relative price of a bag of cookies ​changed? 3 boxes of donuts When the price of a bag of cookies rises to ​$3.00​, the relative price of a box of donuts increases. Decreases

The table shows the marginal utility that Ali gets from smoothies and movies. Ali has​ $30 a week to spend. The price of a movie ticket is​ $6 and the price of a smoothie is​ $3. If Ali buys 4 smoothies a week and sees 3​ movies, does he spend all​ $30? What is his utility from smoothies and his utility from​ movies? Does he maximize his​ utility? if​ not, which good must he buy more​ of? Quantity ​(per day) Marginal utility from smoothies movies 1 7 30 2 6 24 3 5 18 4 4 12 5 3 6 6 2 0

If Ali buys 4 smoothies a week and sees 3​ movies, he does spend all of his​ $30. His total utility from smoothies is 22units and his total utility from movies is 72units. Ali is​ _______. not maximizing his utility so he needs to see more movies and buy fewer smoothies

The table shows​ Ben's utility from waffles. Would Ben ever want to buy more than one plate of waffles a day or no waffles​? Ben will buy more than one plate a day if​ _______. Waffle(plates per day)-0,1,2,3,4,5 Total utility- 0,28,48,60,68,72 Marginal utility- 28,20,12,8,4 TWO PART QUESTION

PART A his marginal utility per dollar from the first plate of waffles is greater than the marginal utility per dollar from all the other goods he consumes PART B his marginal utility per dollar from the first plate is less than his marginal utility per dollar from the other goods and services he buys

When Erin has​ $25 to​ spend, she sees 2 movies at​ $10 a movie ticket and buys 1​ six-pack of soda. What is the price of​ soda? If her budget for soda and movies increase to​ $50, what is the change in the relative price of a movie​ ticket? How does her marginal utility per dollar from movies​ change?

The price of a​ six-pack of soda is ​$5 If​ Erin's budget increases and she has​ $50 to spend on soda and movie​ tickets, the relative price of a movie ticket​ _______. DOES NOT CHANGE If​ Erin's budget​ increases, the marginal utility per dollar from movies​ _______. DECREASES

Compared to other​ liquids, gasoline is cheap In​ 2008, when gasoline hit​ $4 a​ gallon, motorists​ complained, but they​ didn't complain about​ $18 for 16 ml of HP ink​ ($4,294.58 per​ gallon). ​Source: The New York Times​, May​ 27, 2008 Why might the prices of printer ink and gasoline provide an example of the paradox of​ value? The paradox of value explains that a gallon of gasoline has​ _______ and a gallon of printer ink has​ _______.

a low price and a low marginal​ utility; a high price and a high marginal utility

Susie spends​ $28 a week on sundaes and magazines. The price of a sundae is​ $4 and the price of a magazine is​ $4. The table shows​ Susie's marginal utility from sundaes and magazines. How many sundaes does she​ buy? If the price of a sundae doubles to​ $8 and other things remain the​ same, how many sundaes will she​ buy? What are two points on her demand curve for​ sundaes? Sundaes Magazines Quantity per week Marginal utility Quantity per week Marginal utility 1 60 1 40 2 56 2 32 3 50 3 28 4 42 4 25 5 32 5 23 6 20 6 22

When the price of a sundae is​ $4, Susie buys 5 sundaes. When the price of a sundae is​ $8, Susie buys 2 sundaes. Two points on​ Susie's demand curve for sundaes are​ _______ sundaes demanded at a price of​ $4 and​ _______ sundaes demanded at price of​ $8. 5; 2

Jim spends all his income on apartment​ rent, food,​ clothing, and vacations. He gets a pay raise from​ $3,000 a month to​ $4,000 a month. At the same​ time, airfares and other​ vacation-related expenses increase by 50 percent. How has​ Jim's budget in terms of airfares and other​ vacation-related expenses​ changed? Is Jim better off or worse off in his new​ situation? ​Jim's real income in terms of airfares and other​ vacation-related expenses​ _______. Jim is​ _______.

decreases; either better or worse off depending on how he allocates his budget

The table shows Kent's total utility from salads and pizzas. When the price of a salad is ​$4​, the price of a pizza is ​$5​, and Kent has ​$28 a week to​ spend, he buys 2 salads and 4 pizzas. Does Kent maximize his total​ utility? Kent ​_______ maximize his total utility because his ​_______. Salads Pizzas Quantity per week Total utility Quantity per week Total utility 0 0 0 0 1 14 1 24 2 26 2 45 3 36 3 63 4 42 4 78 5 46 5 90 6 48 6 99

does​; marginal utility per dollar from salads and pizzas is equal

Read Eye on Song Downloads and Streaming in the eText or click on the icon LOADING... to open a copy. Now use the following information to answer the​ questions: In​ 2018, Americans downloaded 400 million singles at​ $1.20 each and 50 million albums at​ $10 each. They also bought 52 million albums on CDs at​ $13 each and 50 million streaming subscriptions at​ $94 each. What does marginal utility theory tell you about the marginal utility of a single​ download, an album​ download, an album on a​ CD, a streaming​ subscription, and a song​ streamed? When utility is​ maximized, the marginal utility from a music format is​ _______.

greater the higher its price the ratio of the marginal utility from a streaming subscription to the marginal utility from albums on CDs is 7.2

Apple Music Offering​ Six-Month Free Trial to Students Students can now get a​ six-month free​ trial, and when the trial​ ends, the Apple Music plan for students is​ $4.99 per​ month, below the​ $9.99 per month for others. ​Source: MacRumors​, July​ 9, 2019 Lucy is a student and her trial is about to end. How will she decide whether to continue with the Apple Music plan or end​ it? Lucy will decide to​ _______.

keep the Apple Music plan or end​ it, whichever decision maximizes her total utility

Watch video without dinging data caps ​Verizon, the biggest wireless​ company, will let its customers watch​ ad-sponsored video free from data caps. ​Source: Associated​ Press, December​ 15, 2015 What is the effect of exempting video from data caps on a​ person's budget line and the quantities of video and other data​ used? Exempting video from data caps is a way of lowering the price of watching a​ video, so a​ person's budget line will​ _______.

rotate outward When Verizon exempts​ ad-sponsored video from data​ caps, the marginal utility per dollar from videos will initially​ _______ the marginal utility per dollar from other​ data, so consumers will watch​ _______. ​exceed; more videos and use less other data

The table shows Kent's total utility from burritos and hot dogs. When Kent buys 6 burritos and 6 hot dogs​, what is his total utility and his marginal utility from the sixth burrito​? If the price of a burrito is ​$2​, what is his marginal utility per dollar from burritos​? Burritos Hot dogs Quantity per week Total utility Quantity per week Total utility 0 0 0 0 1 28 1 48 2 52 2 90 3 72 3 126 4 84 4 156 5 92 5 180 6 96 6 198

total utility when he buys 6 burritos and 6 hot dogs is 294 units. Kent's marginal utility from the sixth burrito is 4 units. If the price of a burrito is ​$2​, then the marginal utility per dollar from burritos when Kent buys 6 burritos is 2 units per dollar.