STEVENS INSTITUTE OF TECHNOLOGY
SCHOOL OF BUSINESS
BT 244-A: MICROECONOMICS HOMEWORK
(The Rational Consumer)
Please answer all the question below. You must show your calculations in detail to get full credit. All
graphs and tables should be self-explanatory and labeled properly. You are free to discuss with your
peers but you must submit your own work with your own words. Remember, no late submissions will be
accepted.
“Learn economics not just for a better grade, but also for a better living…”
1) Please complete the TU, MU and MU/P columns on the following table.
Tacos—$3 Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
each
1 taco ? 90 ?
2 tacos 160 ? ?
3 tacos 177 ? ?
Flan — Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
$2 each
1 flan 50 ? ?
2 flans ? 8 ?
3 flans 60 ? ?
Coke— Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
$1 each
1 Coke 35 ? ?
2 Cokes ? ? 17
3 Cokes 62 ? ?
*Mexican dessert
2) Bruno can spend his income on two different goods: smoothies and energy bars. For each of the following three
situations, decide if the given consumption bundle is within Bruno’s consumption possibilities. Then decide if it
lies on the budget line or not.
a) Smoothies cost $2 each, and energy bars cost $3 each. Bruno has income of $60. He is considering a
consumption bundle containing 15 smoothies and 10 energy bars.
b) Smoothies cost $2 each, and energy bars cost $5 each. Bruno has income of $110. He is considering a
consumption bundle containing 20 smoothies and 10 energy bar.
c) Smoothies cost $3 each, and energy bars cost $10 each. Bruno has income of $50. He is considering a
SCHOOL OF BUSINESS
BT 244-A: MICROECONOMICS HOMEWORK
(The Rational Consumer)
Please answer all the question below. You must show your calculations in detail to get full credit. All
graphs and tables should be self-explanatory and labeled properly. You are free to discuss with your
peers but you must submit your own work with your own words. Remember, no late submissions will be
accepted.
“Learn economics not just for a better grade, but also for a better living…”
1) Please complete the TU, MU and MU/P columns on the following table.
Tacos—$3 Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
each
1 taco ? 90 ?
2 tacos 160 ? ?
3 tacos 177 ? ?
Flan — Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
$2 each
1 flan 50 ? ?
2 flans ? 8 ?
3 flans 60 ? ?
Coke— Total Utility (TU) Marginal Utility (MU) (Marginal Utility)/Price (MU/P)
$1 each
1 Coke 35 ? ?
2 Cokes ? ? 17
3 Cokes 62 ? ?
*Mexican dessert
2) Bruno can spend his income on two different goods: smoothies and energy bars. For each of the following three
situations, decide if the given consumption bundle is within Bruno’s consumption possibilities. Then decide if it
lies on the budget line or not.
a) Smoothies cost $2 each, and energy bars cost $3 each. Bruno has income of $60. He is considering a
consumption bundle containing 15 smoothies and 10 energy bars.
b) Smoothies cost $2 each, and energy bars cost $5 each. Bruno has income of $110. He is considering a
consumption bundle containing 20 smoothies and 10 energy bar.
c) Smoothies cost $3 each, and energy bars cost $10 each. Bruno has income of $50. He is considering a
