Topic 7 Consumer Choice Assignment 1
1. The table below represents how Marco feels about chocolate candy bars.
a. Fill in the missing values for total utility and marginal utility.
Instructions: Enter your answers as a whole number.
Chocolate Candy Bars and Marco's Utility
Chocolate Candy Total Utility Marginal Utility
Bars (utils) (utils)
0 0 —
1 25 25
2 42 17
3 54 12
4 62 8
5 66 4
6 65 –1
Suppose Marco currently has two candy bars. You tell Marco you will give him either a
soda, which gives him 22 utils of happiness, or two additional candy bars.
b. Which is he likely to prefer?
A soda
Explanation
a. When consumption increases from 0 to 1, total utility increases from 0 to 25.
Thus, marginal utility is 25 (25 – 0). When consumption increases from 1 to 2,
marginal utility is 17. Consequently, total utility increases by 17 to 42 (25 + 17).
The same logic can be used to fill in the other cells of the table. However, for a
quantity of 4, neither total utility nor marginal utility is provided. The problem
can be solved when we consider that for a quantity of 5, marginal utility is 4. This
shows that total utility increases by 4 when quantity increases from 4 to 5. Since
total utility for a quantity of 5 is 66, total utility for a quantity of 4 is 62 (66 – 4).
b. Marco has two candy bars, which give him a utility of 42 utils. Adding a soda
would increase his utility to 64 (42 + 22). If he consumes four candy bars (2
candy bars + 2 extra candy bars), his utility will be only 62 utils.
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, Topic 7 Consumer Choice Assignment 2
2. Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays
the $20 entry fee. Biff realizes there is very little chance that he will actually win the
contest. He just likes the idea of being able to eat all the hot dogs he wants. The table
below shows Biff’s utility from eating hot dogs.
Instructions: Enter your answers as a whole number. If you are entering any negative
numbers be sure to include a negative sign (-) in front of those numbers.
a. Use the table below and fill in the values for marginal utility.
Hot Dogs and Biff's Utility
Hot Dogs Total Utility (utils) Marginal Utility (utils)
5 48 —
6 52 4
7 54 2
8 55 1
9 54 -1
10 51 -3
b. Use the table to graph Biff's total utility and marginal utility for hot dogs.
Instructions: Use the tool provided 'Total Utility' to plot Biff"s total utility point by
point (6 points total).
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:05:49 GMT -05:00
https://www.coursehero.com/file/44349682/Topic-7-Consumer-Choice-Assignmnetdocx/
1. The table below represents how Marco feels about chocolate candy bars.
a. Fill in the missing values for total utility and marginal utility.
Instructions: Enter your answers as a whole number.
Chocolate Candy Bars and Marco's Utility
Chocolate Candy Total Utility Marginal Utility
Bars (utils) (utils)
0 0 —
1 25 25
2 42 17
3 54 12
4 62 8
5 66 4
6 65 –1
Suppose Marco currently has two candy bars. You tell Marco you will give him either a
soda, which gives him 22 utils of happiness, or two additional candy bars.
b. Which is he likely to prefer?
A soda
Explanation
a. When consumption increases from 0 to 1, total utility increases from 0 to 25.
Thus, marginal utility is 25 (25 – 0). When consumption increases from 1 to 2,
marginal utility is 17. Consequently, total utility increases by 17 to 42 (25 + 17).
The same logic can be used to fill in the other cells of the table. However, for a
quantity of 4, neither total utility nor marginal utility is provided. The problem
can be solved when we consider that for a quantity of 5, marginal utility is 4. This
shows that total utility increases by 4 when quantity increases from 4 to 5. Since
total utility for a quantity of 5 is 66, total utility for a quantity of 4 is 62 (66 – 4).
b. Marco has two candy bars, which give him a utility of 42 utils. Adding a soda
would increase his utility to 64 (42 + 22). If he consumes four candy bars (2
candy bars + 2 extra candy bars), his utility will be only 62 utils.
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:05:49 GMT -05:00
https://www.coursehero.com/file/44349682/Topic-7-Consumer-Choice-Assignmnetdocx/
, Topic 7 Consumer Choice Assignment 2
2. Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays
the $20 entry fee. Biff realizes there is very little chance that he will actually win the
contest. He just likes the idea of being able to eat all the hot dogs he wants. The table
below shows Biff’s utility from eating hot dogs.
Instructions: Enter your answers as a whole number. If you are entering any negative
numbers be sure to include a negative sign (-) in front of those numbers.
a. Use the table below and fill in the values for marginal utility.
Hot Dogs and Biff's Utility
Hot Dogs Total Utility (utils) Marginal Utility (utils)
5 48 —
6 52 4
7 54 2
8 55 1
9 54 -1
10 51 -3
b. Use the table to graph Biff's total utility and marginal utility for hot dogs.
Instructions: Use the tool provided 'Total Utility' to plot Biff"s total utility point by
point (6 points total).
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:05:49 GMT -05:00
https://www.coursehero.com/file/44349682/Topic-7-Consumer-Choice-Assignmnetdocx/
