Tutorial Sheet- Week Five
.pdf
School
University of Guyana**We aren't endorsed by this school
Course
ECONOMICS 1100
Subject
Economics
Date
Dec 18, 2024
Pages
1
Uploaded by SuperThunderRat55
Introductory Microeconomics- ECN 1100Semester IAcademic Year 2024/2025Week FiveOctober 21, 2024 – October 25, 2024------------------------------------------------------------------Question One: Calculating total utility (TU), marginal utility (MU) and the Cardinalist approach. (a)Amy has an income of $5 to spend on two goods. Pa = $1 Pb =$2. What combination will maximize her utility? (b)Complete the table a)What is the marginal utility of the third unit given the above information?b)What is the total utility when two units are consumed?c)What is the total utility when four units are consumed?d)At what level of units does diminishing marginal utility occur?Question Two: Impact of changes in prices and income on the budget line. Clarisse spends her income of $24 on two goods, W and V. W sells for $3 and V sells for $2. a)Draw the budget constraint to show how Clarisse can spend her money on the two goods. b)Calculate the slope of the budget line. c)If the price of V reduces by $1 what will happen to the budget line?d)If the price of W increases by $1 what will happen to the budget line?e)If Clarisse’s income increased by $6, what will happen to the budget line? =========
