Name:

Independence Junior College

Microeconomics 100
October 22, 2020
Seat Task Practice 4. Calculate the Maximum Marginal Utility for the
Assessment: Budget Line & Maximum Marginal Utility following.
[a] Income 56.00, t-shirts= $ 14.00 & Juice = $7.

1. [a] A consumer had $8.00 to spend on two Units of TU MU Mu Units TU MU MU

items, pizza costing $2.00 and soda T-shirt per of per
costing $1.00. How many possible $14.00 Juice $7.
combinations of soda and pizza could 0 0 0
the individual received from his budget? 1 22 1 14
2 43 2 31
3 63 3 45
[b] If the price of pizza drops to $1 with all
4 81 4 58
other things remain constant. Explain
5 97 5 70
what would happen to the budget line?
6 111 6 81
7 123 7 91
[c] Alternatively, if the price of soda
increases to two dollars with all other
things remain constant. Explain what
will happen to the budget line?
45 Calculate the Maximum Marginal Utility for the
following.
[d] State the number of combinations for
[a] Income $12. Apples= $ 2.00 & Grapes = $3.
each of the following scenarios & plot
the following on a graph.
Units of TU MU Mu Units TU MU MU
apples per of per
$2.00 Grapes $3.
2. [a] Jose has a total of $56 to spend. T-shirts 0 0 0
cost $14 and movies cost $7. How many 1 40 1 60
combinations of T-shirts and Movies can 2 70 2 90
Jose receive from his budget? Graph 3 90 3 106
Jose’s budget constraints. 4 100 4 114
5 106 5 120
[b] What if Jose’s budget was to decrease to
$42, what would be his combination of
items?

3. Calculate the Maximum Marginal Utility for the

following.
[a] Budget 40.00, Drinks= $ 8.00 & Sweets = $4.

Units of TU MU Mu Units TU MU MU
drinks per of per
$8.00 sweets $4.
0 0 0
1 50 1 40
2 91 2 74
3 103 3 84
4 112 4 90
5 118 5 94
6 122 6 94