Question: Use the information in table 3 below to answer questions 38 - 40. The table shows Martha's Total Utility for ice cream. Table 4: Martha's

Use the information in table 3 below to answer questions 38 - 40. The table shows Martha's Total Utility for ice cream.

Table 4: Martha's Utility Schedule

Quantity (cups)

Total Utility

Marginal Utility

Consumer Surplus

0

--

1

250

2

520

3

680

4

800

5

890

What is the total utility and marginal utility for three cups and the third cup of ice cream respectively?

a.

680 and 120

b.

680 and 220

c.

680 and 160

d.

680 and 250

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Question 39

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Assume that Martha consumes a 4th cup of ice cream, what would be her consumer surplus if the expected cost of a cup of ice cream is $160?

a.

$110

b.

-$40

c.

-$70

d.

$20

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Question 40

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At what level of consumption did diminishing marginal utility set in?

a.

After the 3rd cup because the consumer surplus is negative

b.

After the 2nd; cup because that is where the marginal utility begins to decline

c.

After the 5th cup because marginal utility is at its lowest

d.

After the 1st cup because marginal utility was zero before

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