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Item6 10points Time Remaining 40 minutes 47 seconds 00:40:47 eBookReferences Item 6 Time Remaining 40 minutes 47 seconds 00:40:47 Question and Exercise 19-10 Suppose a small cheese pizza costs $10 and a calzone costs $5. You have $40 to spend. The marginal utility (MU) that you derive from each is as follows: NumberMU of PizzaMU of Calzone0——1603024028330244202051010 How many of each would you buy? pizza(s). calzone(s). Suppose the price of a calzone rises to $10. How many of each would you buy? pizza(s). calzone(s). Use this to show how the principle of rational choice leads to the law of demand. multiple choice This demonstrates the law of demand because as the total utility falls for calzones, I buy a smaller quantity. This demonstrates the law of demand because as the price of calzones rises, I buy a larger quantity. This demonstrates the law of demand because as marginal utility per dollar changes for calzones, I change the quantity I demand. This demonstrates the law of demand because as the price of calzones rises, I buy a smaller quantity.

          Item6
10points
Time Remaining 40 minutes 47 seconds
00:40:47
eBookReferences
Item 6
Time Remaining 40 minutes 47 seconds
00:40:47
Question and Exercise 19-10
Suppose a small cheese pizza costs $10 and a calzone costs $5. You have $40 to spend. The marginal utility (MU) that you derive from each is as follows:
NumberMU of PizzaMU of Calzone0——1603024028330244202051010
How many of each would you buy?
pizza(s).
calzone(s).
Suppose the price of a calzone rises to $10. How many of each would you buy?
pizza(s).
calzone(s).
Use this to show how the principle of rational choice leads to the law of demand.
multiple choice
This demonstrates the law of demand because as the total utility falls for calzones, I buy a smaller quantity.
This demonstrates the law of demand because as the price of calzones rises, I buy a larger quantity.
This demonstrates the law of demand because as marginal utility per dollar changes for calzones, I change the quantity I demand.
This demonstrates the law of demand because as the price of calzones rises, I buy a smaller quantity.

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Added by Gloria F.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Azat Nurmukhametov

10/06/2022

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Item6 10points Time Remaining 40 minutes 47 seconds 00:40:47 eBookReferences Item 6 Time Remaining 40 minutes 47 seconds 00:40:47 Question and Exercise 19-10 Suppose a small cheese pizza costs $10 and a calzone costs $5. You have $40 to spend. The marginal utility (MU) that you derive from each is as follows: NumberMU of PizzaMU of Calzone0——1603024028330244202051010 How many of each would you buy? pizza(s). calzone(s). Suppose the price of a calzone rises to $10. How many of each would you buy? pizza(s). calzone(s). Use this to show how the principle of rational choice leads to the law of demand. multiple choice This demonstrates the law of demand because as the total utility falls for calzones, I buy a smaller quantity. This demonstrates the law of demand because as the price of calzones rises, I buy a larger quantity. This demonstrates the law of demand because as marginal utility per dollar changes for calzones, I change the quantity I demand. This demonstrates the law of demand because as the price of calzones rises, I buy a smaller quantity.

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Transcript

00:02 Hello, this table shows the total utility and for simplicity we can calculate the amounts of marginal utility.

00:11 So we have quantities.

00:13 1, 2, 3, 4, 5, 6 and 7.

00:21 Total utility is given.

00:24 It's 0, 30, 48, 60, 70, 70, 78, 80 and 76.

00:38 And now we can find the marginal utility.

00:41 If the utility from adding one more pizza, here we have 30, 30 minus 0 is 30, 48 minus 30 is 18, then we have 12.

00:55 12, 10, 8, 2 and negative.

01:03 And now let's answer to your questions.

01:07 So how much, the first question, how much marginal utility does joseph derive from the third piece of pizza? from the third is, it's equal to 12.

01:21 From our table, it's 12.

01:26 Next question, after eating how many pieces of pizza, does marginal utility start to decline so it starts decline after eating the sixth so as you can as you can see when he eats his seventh seventh piece total utility is declining so marginal utility is a negative total utility and for marginal utility we can see it starts exactly from the first piece.

02:31 So the first piece has 30 units of marginal utility and the second has only 18.

02:43 So after the first one marginal utility starts to decline.

02:48 If pizza were free, what is the maximum number of pieces joseph would eat at the evening? so if it's free, he will eat six pieces.

03:05 Oops, let me read correctly.

03:09 Six pieces, because six pieces maximize his total utility.

03:16 He will have 80 units.

03:19 Of total utility.

03:30 So now we can construct the two.

03:51 Now we need to construct the diagram.

04:03 Here we have 80, 40, oops, 40, 20, 20, 40, 60.

04:18 Let me use different colors.

04:20 So red one will be total utility.

04:22 From the first it's 30, from the second it's 48, then it's 60, then it's 60, then 70, 78, then the red one is 80 and then it's decreasing.

04:50 This the red one is total utility...

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