Question 22 6 pts Kumiko is not at her consumer equilibrium because she sees too many movies and buys too few books. As she moves toward her consumer equilibrium, her marginal utility from movies will ______ and her marginal utility from books will ______. decrease; decrease increase; decrease increase; increase decrease; increase Next
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This means that she is not maximizing her total utility from consuming both movies and books. Show more…
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10. For this problem, assume that Joe has $80 to spend on books and movies each month and that both goods must be purchased whole (no fractional units). Movies cost $8 each, and books cost $20 each. Joe's preferences for movies and books are summarized by the following information: MOVIES NO. PER MONTH TU MU MU/$ 50 22 2.75 80 42 5.25 100 52 6.5 110 57 7.125 116 60 7.5 121 62 7.75 123 63 7.875 BOOKS NO. PER MONTH TU MU MU/$ 2 2 0.1 3 3 0.15 5 5 0.25 6 6 0.3 7 7 0.35 a. Fill in the figures for marginal utility and marginal utility per dollar for both movies and books. b. Are these preferences consistent with the law of diminishing marginal utility? Explain briefly: c. Given the budget of $80, what quantity of books and what quantity of movies will maximize Joe's level of satisfaction? Explain briefly:
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