Describe how marginal utility and demand are related

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Why does a newspaper dispenser open to a stack of newspapers and essentially “trusts” a consumer to take just one copy whereas a soft drink vending machine does not “trust” consumers and dispenses one can for each purchase?

Describe how marginal utility and demand are related.

Give a brief description of the law of diminishing marginal utility and use it to explain the downward slope of the demand curve.

What are the four dimensions of the typical consumer’s situation?

Explain the utility maximizing rule for two products in words and using algebra.

What is consumer equilibrium? How is it achieved?

Explain the utility maximizing rule in terms of hot dogs and hamburgers purchased at a ballgame.

Why is it not sufficient to just compare the marginal utility of two goods when maximizing utility?

Assume that a consumer purchases a combination of products A and B. The MUa is 5 and the Pa is $5. The MUb is 6 and the Pb is $6. What should this consumer do to maximize utility?

Reference no: EM131094529

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