What is the total utility realized from the optimum purchase

Reference no: EM13223821

Using the following table, compute the elasticities of demand and supply, conduct the Total Revenue Test, and indicate for each elasticity coefficient if it is Elastic, Inelastic, or in Unit Elasticity.

Total

Price Quantity Demanded Ed Quantity Supplied Es Rvenue

$5 45 77

4 50 73

3 56 68

2 61 61

1 67 57

2. Answer the questions below on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4 respectively and that the consumer's income is $18.

Hint: You base your purchase decision on marginal utility per dollar.

Units of L Total Utility of L Units of M Total Utility of M

1 9 1 16

2 15 2 28

3 18 3 36

4 20 4 40

5 21 5 42

a) How many units of the each of the two products will the consumer purchase?

b) What is the total utility realized from the optimum purchase?

c) If the price of M decreases to $3, would your decision on purchasing change? If so, how?

Reference no: EM13223821

Questions Cloud

Identify a marketing research tool : Identify a marketing research tool that could be used to help define the dollar value of product benifits for a business customer. Explain.

Explain how many liters of oxygen gas can be produced at stp : how many liters of oxygen gas can be produced at STP from the decomposition of 0.250L of 3.00M H2O2 in the reaction according to the chemical reaction shown below 2H2O2(l) ====> 2H2O (l) + O2(g)

Implement your public relations campaign : Describe the mix of media you would use to implement your public relations campaign and explain in detail your objectives for each media form and explain in detail how you can take advantage of community relations to generate positive publicity for..

Sensation and perception worksheet-concept of perceptual set : Conduct an experiment to illustrate the concept of a perceptual set. Engage at least three subjects (family members, coworkers, or friends) in your experiment. Ask your subjects to observe a specific room and take note of everything in the room that ..

What is the total utility realized from the optimum purchase : on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4 respectively and that the consumer's income is $18. Hint: You base your purchase decision on marginal utility per dollar.

What the decomposition of hydrogen peroxide : Iodide ion catalyzes the decomposition of hydrogen peroxide. the reaction is first-order in H2O2. what is the value of the rate constant,k, if the initial rate is 0.00842 mol/(L*s)?

What marketing research should be considered to aid : What marketing research should be considered to aid a companys B2B integrated marketing communcation program? Include an example with your explanation. 2-3 paragraphs.

How does erp help business : Technology should be used as a resource to enhance operational performance of a business. How does ERP help business?

How much principal and interest would bank receive : 1. If your bank held 3% of the units issued by a unit trust and the mortgages in the trust repaid $15,000,000 in interest and $2,300,000 in principal in its first year, how much principal and interest would your bank receive that year

User Account

All Pages