Question: The new Spooky Tooth album just can out. You have listened to it five times today and experienced the units of utility shown below:
LISTEN UTILITY
1 12
2 10
3 7
4 2
5 -6
1) Using excel or neatly creating by hand and scanning, draw a graph (as seen in the assigned material) showing total utility. Explain what it means.
2) Create a graph of diminishing utility. Explain what it means.
3) In order to maximize utility, how many times should the album be listened to? Provide an explanation.
4) In terms of utility, what might get you to switch to another activity before the point of maximum utility is reached?
5) How can marginal utility be used as a guiding principle when deciding what is the ideal mix of activities to allocate your time between with the goal of achieving maximum benefits?