Problem
Deriving a Demand Curve Using Marginal Utility Analysis
|
Movie
|
Wine (Bottle)
|
|
Quantity
|
Total Utility
|
Marginal Utility
|
Quantity
|
Total Utility
|
Marginal Utility
|
|
0
|
0
|
|
0
|
0
|
|
|
1
|
140
|
|
1
|
180
|
|
|
2
|
260
|
|
2
|
340
|
|
|
3
|
360
|
|
3
|
460
|
|
|
4
|
440
|
|
4
|
510
|
|
|
5
|
500
|
|
5
|
540
|
|
The table illustrates the utility a consumer receives from the consumption of different amounts of two products.
1. Complete the table.
2. Assume that you have $50 a month to spend on the two products and that the price to see a movie is $10. A bottle of wine costs $10 as well. What combination of the two goods will maximize your utility?
3. Assume that the price of wine falls to $5. Now what combination of the two goods will maximize your utility?
4. Based on your results, draw your demand curve for wine. (HINT: you need just two points.)
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.