'Problem 1\r'

'20-1. The campus pizzeria sells a single pizza for $12. If you order a guerilla pizza, however, the pizzeria charges a footing of only(prenominal) $5 for the spare pizza. exempt how an bring ining of bare(a) avail helps to pardon the pizzeria’s determine strategy. 20-1-A. The pricing method that the pizzeria is using shows they understand how marginal public return-grade works, specifically change magnitude marginal returns. After impingingting the take of satisfaction from the first pizza, a second pizza impart not be quite as rewarding. Getting an additional pizza at a damage of only $5 clams will invite a customer to get it because of the trim down price.Because the significance of the second pizza is slight than the first, a costumer would overhaul slight on it. 20-2. As an undivided consumes more units of an item, the soul eventually experiences diminishing marginal service. This means that to increase marginal utility, the person must consu me less of an item. relieve the logic of this behavior using the simulation in conundrum 20-1. 20-2-A. As a consumer eats their first few slices of pizza, the direct of satisfaction will eventually hit a maximum where they have well enjoyed it. After hitting the train of satisfaction, any piece of pizza after that will diminish the diversion.Therefor, eating less pizza allows the consumer the greatest enjoyment because no pleasure is being added after eating to the foreland of satisfaction. 20-3. Where possible, complete the missing cells in the table. 20-3-A. 20-4. From the data in Problem 20-3, if the price of a cheeseburger is $2, the price of a bag of French fries is $1, and you have $6 to spend (and you spend all of it), what is the utility-maximizing combination of cheeseburgers and cut fries? 20-4-A. The utility-maximizing combination is both cheeseburgers and two orders of french fries. 20-9.Consider the movements that take place from cardinal localise to the beside (A to B to C and so on) along the center utility trim back below as the individual successively increases consumption by cardinal more unit, and answer the questions that follow. a. Which wiz-unit increase in consumption from one evince to the conterminous along the total utility plication generates the highest marginal utility? From point A to point B there is a total utility increase of 5 units, meaning the marginal utility is 5 units as well. Therefor, point A to point B generates the highest marginal utility. b.Which one-unit increase in consumption from one point to the next along the total utility curve generates zero marginal utility? school principal E to point F generates no marginal utility, meaning the marginal utility is zero. c. Which one-unit increase in consumption from one point to the next along the total utility curve generates negative marginal utility? Point F to point G decreases total utility from 11 to 10 units meaning marginal utility is negati ve. 20-10. Draw a marginal utility curve corresponding to the total utility curve depicted in Problem 20-9. 20-12.Refer to the following table for a contrastive consumer, and assume that each week this consumer buys only hot dogs and tickets to baseball games. The price of a hot dog is $2, and the price of a baseball game is $60. If the consumer’s income is $128 per week, what standard of each item will he purchase each week at a consumer optimum? 20-12-A. The consumer will purchase 2 baseball game tickets and 4 hot dogs each week at a consumer optimum. Equal marginal utilities per dollar occur at the consumption level of 2 baseball game tickets and 4 hot dogs, with the total income equaling $128. The marginal utility per dollar spent equals 5.\r\n'