Question: 6. The table below displays the total utility U(X ) that corresponds to the number of units of X consumed by three different consumers (Abe,

6. The table below displays the total utility U(X )

that corresponds to the number of units of X consumed by three different consumers (Abe, Barbara, and Chuck), holding everything else constant:

Abe Barbara Chuck U(X) x U(X) x U(X) x 10 2 10

a. Compute the marginal utility of X for each of the three consumers at each level of X.

b. Based on the data in the table, can you tell whether any of these consumers are violating any of the standard assumptions about preferences?

c. Is it possible that any of these three consumers have the exact same preferences, and that columns for the three consumers differ only because of the arbitrary units that are used to measure utility? Explain.

Abe Barbara Chuck U(X) x U(X) x U(X) x 10 2 10 2 10 2 14 3 10 3 12 3 16 4 10 4 15 4 17 5 9 5 19 5 17.5 6 8 6 24 60

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Microeconomics Questions!