The table below displays the total utility U(X ) that corresponds to the number of units of X...

Question

The table below displays the total utility U(X ) that corresponds to the number of units of X consumed by three different consumers (Abe, Barbara, and Chuck), holding everything else constant:

a. Compute the marginal utility of X for each of the three consumers at each level of X.

b. Based on the data in the table, can you tell whether any of these consumers are violating any of the standard assumptions about preferences?

c. Is it possible that any of these three consumers have the exact same preferences, and that columns for the three consumers differ only because of the arbitrary units that are used to measure utility? Explain.

David · Accepted Answer

1 
 
Solution  
Part a  
X MUx
Auon
 MUx
Barbara
 MUx
Camira
2 -  - - 
3 4 0 2 
4 2 0 3 
5 1 -1 4 
6 0.5 -1 5
Part b  
It is apparent from the above table that the value of marginal utility of Barbara is negative for 5
th
 
unit (i.e. -1) and 6
th
 unit (i.e. -1) consumed.

The table below displays the total utility U(X ) that corresponds to the number of units of X consumed by three different consumers (Abe, Barbara, and Chuck), holding everything else constant: a....

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