M Inbox (3) - kashilX Test 2.pdf X In Course: ARM385 X G explain the conc X A Define and Discux Consumer Equili X c The news articl G What are the twicX + X C O & file:///C:/Users/Lukas Mc/Downloads/Test 2.pdf E Getting Started @ Gmail @ YouTube Maps 1 of 1 - + Automatic Zoom ARM3851 Test 2 2022 Answer all the questions Total marks: 40 1) Explain the concept of consumer equilibrium. (4 marks) 2) What are the two conditions that are met if a consumer is maximizing utility? (6 marks) 3) The table above shows Danielle's utility from ice cream and romance novels. Ice cream Romance novels Quantity Total utility Quantity Total utility 95 170 180 320 3 255 450 4 320 560 375 650 6 420 720 a) What is Danielle's marginal utility from the 4th novel? (2 marks) b) The price of ice cream is $5 per gallon and a novel is $10. If Danielle's budget for these two goods is $50 and she buys 2 gallons of ice cream, how many novels can she buy? If she buys 6 gallons of ice cream, what is her marginal utility per dollar spent on novels? (8 marks) c) Which combination of the two goods is better: 4 gallons of ice cream and 3 novels or 6 gallons of ice cream and 2 novels? (4 marks) 71 F OLDe 3:30 PM Sunny 5/6/2022 2