dolution

 

 

1. The table below shows how Brett’s utility increases as the number of avocados he consumes (per month) increases. Brett’s utility is measured in utils, a name that economists invented to describe

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units of utility.

                                               

a. Plot Brett’s total utility on a scale diagram, with utils on the vertical axis and the number of avocados  (per month) on the horizontal axis.

 

b. Compute the marginal utility for each avocado and fill in the table.

 

c. Plot the marginal utility on a scale diagram, with utils on the vertical axis and the number of avocados (per month) on the horizontal axis. (Make sure to plot marginal utility

at the midpoints between units.)

d. Explain why it is reasonable that Brett’s utility increases by smaller and smaller amounts for each successive avocado consumed.

 

 
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