Practice Worksheet 3 - Marginal Utility |
1) You are attending a reception in honor of your economics instructor. Slices of your favorite pizza are provided for free. You may eat as much as you like. Below is a partial table indicating the enjoyment you receive from eating each slice of pizza.
Slices Consumed Marginal Utility Total Utility
0 ---- 0 1 10 2 18 3 5 4 26 5 0 6 19
a) Complete the table above. (SEE TABLE
ABOVE)
b) Graph both the Total Utility curve and the Marginal Utility curve on the same Utility -
Quantity graph.
c) According to the table (and assuming you are a
rational, utility-maximizing agent) how many pieces of pizza will you
eat at in order to maximize your total utility?
d) What will be the marginal utility of the last
piece of pizza that you eat?
2) Maxine Pleasure is engaged in her favorite pastime - watching C-SPAN coverage of the latest Presidential sex scandal at the Loose Goose micro-pub. Maxine is drinking "Loosie's Golden", and eating chocolate brownies and jalapeno peppers - her favorite meal. Maxine has $17 to spend. The table below indicates Maxine's utility from consuming her three favorite foods. "Loosie's Golden" is $3 a pint. The chocolate brownies cost $2 and the jalapenos are $1 each.
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MU of Loosie's Golden |
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a) How many units of each will Maxine buy to maximize her total pleasure?
Show any calculations you may need to make.
b) Briefly explain the reasoning behind your answers.
c) Suppose Maxine values each dollar at 9 units of utility. What will she choose to do now?
d) How many units of each will Maxine buy if she only has $13 to spend?
(No need to show additional work.)
Have a question? Send me a message at: martinezp@lcc.edu