Concepts of Utility
Is Jane maximizing her utility? Explain your reasoning and show any calculations.
Marginal utility is the extra fulfillment a buyer gains from devouring one more unit of a decent or administration. The negligible utility is a significant financial idea since business analysts use it to decide the amount of a thing a customer will purchase. The positive peripheral utility is the point at which the utilization of an extra thing expands the absolute utility, while a minor negative utility is a point at which the utilization of an extra thing diminishes the all-out utility.
Jane is amplifying her utility on the grounds that the principal request gave her some fulfillment, and as she makes more requests, she will start to get less fulfillment when contrasted with her first request. In view of the count sheet over, Jane’s negligible utility per dollar from the chicken sandwich.
Calculations
(A) 100÷ 4=25
(B) 72÷4=18
(C) 60÷4=15
If Jane is not maximizing her utility with the original purchase combination, remembering the Law of Diminishing Marginal Utility, would she be better off buying just one more fry? Explain your reasoning and show any calculation
Jane would be more awful off if she somehow happened to buy an extra request of fries since her negligible utility per dollar on her 3rdfry is as of now a score of 3. Along these lines, her fulfillment level would be a 1.5 for a 4thorder of fries.
If Jane is not maximizing her utility with the original purchase, remembering the Law of Diminishing Marginal Utility, would she be better off buying one fewer fries and one more chicken sandwich? Explain your reasoning and show any calculation
Jane would be in an ideal situation purchasing a 4thsandwich as opposed to her last request of fries. The explanation behind this is on the grounds that her utility per dollar for the 3rdsandwich is at a 15 and would be more noteworthy than the third request of fries, which is an at 3. So as to make the majority of her cash and to adjust her peripheral utility per dollar, Jane would need to purchase a 4thsandwich and just two sets of fries. Her minimal utility per dollar for a 4thsandwich would be 40. The equation would be 40/$4 = 10. This would adjust the two fries and four sandwiches, and she would have gone through every last bit of her cash, which would augment her utility.
Remembering the Learning Practice in Unit 3, in the year 107 WBCE (Way Before theCommon Era), the Gondwanaland Chairman of Production reported that the sum berry growers were able to meet an average demand of 700 barrels of gum berries per month at an average a price of $70 per barrel. In the year 108 WBCE, the growers were plagued with a sum berry bug infestation that reduced average output, causing production to fall to only 600 barrels per month, causing the price to rise to $84 per barrel. The following table shows the Chairman’s rep.
| Year(WBCE) | Monthly barrels of gooseberries demanded | Price per barrel |
| 107 | 700 | $75 |
| 108 | 600 | $84 |
What is the monthly average total revenue for year 107, and the monthly average total revenue for year 108? How do these numbers compare to each other?
Using your answer to part a. above, how could you have predicted this change in total monthly revenue?
Since it is such a little change in cost, part An’s the answer can be utilized to anticipate an adjustment in the absolute month to month income; in this manner, as the cost rises, the amount request went down, which speaks to the law of demand and will have little effect on the complete income, expanding the month to month income with an exceptionally slight contrast from the current income.