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

  Question the table sets out the demand and supply schedules

question the table sets out the demand and supply schedules for chewing gum. a draw a graph of the market for chewing

  11assume you are the director of design for a cell phone

11.assume you are the director of design for a cell phone manufacturing company. you work closely with the new product

  What other changes might you want to make at the same time

Why would a tax credit for mortgage intrest be worth more to lower income families than a deduction? Would you favor changing the benefit from a tac deduction to a tax credit? What other changes might you want to make at the same time? WHY?

  Graph marys marginal cost curve

Graph Mary's marginal cost curve using the orange line and her marginal revenue curve using the blue line

  Perceived demand curve of shape decreases the incentive

The Pretty Paper Company has joined a cartel of paper producers. Under the rules of the cartel, Pretty Paper will produce 1,500 packs of paper and sell them for $5 a pack. The members of the cartel watch each other to see if anyone is cheating. Expla..

  Determine the present worth of this series of cash flows

A person you trust asks you to loan them $2,000 at the end of year 1, $1,000 at the end of year 2, nothing in year 3, and then they will pay you $1,000 in year 4, $2,000 in year 5, and $3,000 in year 6. They note that you will pay out a total of $3,0..

  Netflix has been disruptive to more than one market

Netflix has been disruptive to more than one market. Select the market in which you think it has been least disruptive.

  Knowledge economy and knowledge worker

Haven’t there always been “knowledge” workers, people who do more than what a robot could do? Why, then, has such a big deal been made of the “knowledge economy” and the “knowledge worker” in recent years?

  Consumption and investment through monetary policy

Use the following information for the next 10 questions. You should draw a graph that depicts the situation below and use your picture to answer the questions. Assume that wages and prices are sticky and that we start at a long run equilibrium. Assum..

  Examine the major effects that government policies

Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on a low-calorie, frozen microwaveable food company.

  What is the amount of new loans the bank can make

A bank receives new deposits equal to $200,000 and the required reserve ratio is 10%. Assuming that desired ratio is equal to their required reserve ratio and no currency drain (C=0) answer the following questions: What is the amount of new loans the..

  Reserves and excess reserves using required reserve ratio

First, use a T-account to show how a $100 deposit affects the balance sheet. Separate the funds into required reserves and excess reserves using a required reserve ratio of 0.1. Second, demonstrate what happens to the balance sheet when the bank loan..

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