Question 1
Refer to the information provided in Figure 6.10 below to answer the question(s) that follow.
Refer to Figure 6.10. Kyle would increase his consumption of turkey sandwiches from 5 to 7 per week if their price fell from $8 to $6. This illustrates the idea of
◦ consumer surplus.
◦ the law of diminishing marginal utility.
◦ cross-price elasticity of demand.
◦ technical efficiency.
Question 2
The marginal utility of the first cup of coffee that Tom drinks in the morning is worth $2.00. The marginal utility of the 9th cup of coffee he drinks is positive while the marginal utility of the 10th cup of coffee he drinks in the morning is worth $0. This implies that at a price of $0, Tom would drink
◦ zero cups of coffee per morning.
◦ at most 10 cups of coffee per morning.
◦ more than 10 cups of coffee per morning, but the actual number is indeterminate from this information.
◦ an infinite number of cups of coffee each morning.
A graphical representation of the marginal value theorem.
Global Coffee Production
Marginal Products of Physical and Human Capital
Before After Coffee
An organizational specialist is hired as a consultant to a company planning to open a coffee ...