Difference between marginal utility and total utility

Assignment Help Business Economics
Reference no: EM131393502

What is the difference between marginal utility and total utility?

Psychologist have found that with the same cereal in each box people would prefer to buy the red box. Psychologist think that this shows people act irrationally when making purchasing decisions. Would an economist agree that preference for red boxes is irrational? Why?

Congress is proposing a 10 cent tax on gasoline. He plans to compensate individuals for the tax by giving everybody a tax rebate equal to the increase in the amount they would have to pay for gasoline given their current consumption. An economist Greg Mankiw states that because people will be compensated for the price increase their purchase choices will not change? Is he right?

Reference no: EM131393502

Questions Cloud

Monopolistically competitive with economies of scale : Assume the gizmo industry is monopolistically competitive, with economies of scale. Total market size (S) in the Home country is a fixed 5 million gizmos, and each firm has a fixed cost (FC) of $10 million and a constant marginal cost of $100. Solve ..
Suppose all other banks in the system are fully loaned up : Suppose all other banks in the system are “fully loaned up” and they face the same reserve ratio. The maximum potential increase in the money supply is._____ . If the Fed were to change the rr to 10% for this bank then.
Uncovered interest parity : Show how the equation in uncovered interest parity is derived. Explain. Assume the expected $/Yen exchange rate is 0.01 dollars per yen. Further assume that the US interest rate is 8% and the Japanese interest rate is 3%. According to uncovered inter..
Bond valuation-what is the present value of this bond : Bond Valuation. Consider this bond offered by the Government of the Russian Federation: the Face Value of the bond is $1,000, its maturity is 4 years from today, the coupon rate is 5%, and the coupons are paid annually. Assuming the market interest r..
Difference between marginal utility and total utility : What is the difference between marginal utility and total utility? Psychologist have found that with the same cereal in each box people would prefer to buy the red box. Psychologist think that this shows people act irrationally when making purchasing..
Separated by large mountain : There are two cities, S and N, separated by a large mountain. A firm with its manufacturing plant at the top of the mountain sells its product in both cities. Consumers in S: Ps = 410 - 10Qs Consumers in N: Pn = 110 - 5Qn. How many units should the f..
Using the baumol-tobin transactions model : Using the Baumol-Tobin Transactions Model, answer the following. Assume the following. The interest rate is 10%. The ATM fee (transaction cost) for withdrawing money is $2. My monthly income is $1,000. What is the optimal number of trips I will make ..
Discriminating monopolist price in the domestic market : The demand curve in its home market is P = 200 – Q; the demand curve in itsforeign market is P = 160 – 2Q; and its marginal cost is a constant $20 per unit. 19. What is the discriminating monopolist's profit- maximizing output in the domestic market?..
Life cycle theory of consumption : Explain the math and graph of the Life Cycle Theory of Consumption. Using this equation and graph of the Life Cycle Theory of Consumption, explain how a consumer would react to winning the lottery vs. gaining a significant pay raise at work. Explain ..

Reviews

Write a Review

Business Economics Questions & Answers

  Culinary school tuition immediately after high school

You spend $5000 on one year of culinary school tuition immediately after high school. The tuition is not refundable. After 3 months you want to go to college rather than continue culinary school. An economist would tell you that the cost of your cook..

  How much is consumer surplus

Suppose demand for a good is QD = 50 - P and supply is QS = -10 + P. How much is the producer surplus? How much is consumer surplus?

  Explain why the budget line can be called objective

Explain why the budget line can be called "objective" but an indifference curve is called "subjective." Explain why, if a consumer is to be in equilibrium, the marginal rate of substitution of good X for good Y must equal the negative ratio of the pr..

  Consumers perceive several goods to be homogeneous

If consumers perceive several goods to be homogeneous, they believe the goods to be,

  What is the total surplus and producer surplus

Suppose that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese.  The graph also shows that the minimum price at which a few of the producers are willing to sell is $0.06 per pound. In t..

  Edgeworth box diagram to represent initial endowments

Two people from the military, General Equilibrium (player 1) and Major Inefficiency (player 2), have been stranded on an island after a shipwreck. General Equilibrium was able to salvage 50 bags of Spinach (X1) and 50 pounds of rice (Y1) from the shi..

  Concept of diminishing marginal utility

The opportunity cost of Juan's time is $8 per hour. If Juan receives $2 per pound for his fish, what is the optimal number of hours he should spend fishing.

  Risk-averse gold prospector who has struck it rich

Lucky Midas is a risk-averse gold prospector who has struck it rich. He has $W worth of gold— his only wealth—safely stashed away on his claim in the Yukon. He wants to get his gold from his claim to the big city where he hopes to spend it. His frien..

  Five competitive forces has the most significant impact

In general conclude which of the five competitive forces has the most significant impact on approach.

  What ideas from marx remain relevant to contemporary society

What ideas from Marx remain relevant to contemporary society and what ideas must be discarded in the wake of the collapse of the Soviet Union and the Marxist societies of Eastern Europe? What might Weber have said about the last century of global his..

  Aggregrate demand and aggregate supply curves

List the characteristics of each school of thought and draw the aggregrate demand and aggregate supply curves that demonstrate of each school of thought:

  What is the supply for baby cribs

Consider the market for baby cribs. The market for baby cribs is given by Qd = 140 - 0.2p and the market supply of baby cribs is given by Qs = 0.2p - 20, where Qd is the quantity of baby cribs demanded in millions, Qs is the quantity of baby cribs su..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd