Name: Cherybel H.

Tomagan Date: April 22, 2021

Course/Year/Section: BSBA-FM 1-B

UNIT V
UTILITY

2.20 IN BRIEF
The soul of wit. Write a brief response to each question below.

1 On the graph to the left, which curve

represents the greatest total utility?
 curve B

Why?
 Because it sits further away from the
origin than curve A.

2 On the graph to the left, which two points

represent the same amount of total
utility?
 Points A and B

Which point represents the greatest

amount of total utility?
 Point C

3 What is utility?  The satisfaction we obtain from

consuming a good or service

2.21 APPLYING KEY CONCEPTS

Prepared by: MARY ANN M. DE LA VEGA, PhD. Basic Microeconomics -

Unit V
This study source was downloaded by 100000801932233 from CourseHero.com on 05-12-2022 05:03:40 GMT -05:00

https://www.coursehero.com/file/95665216/Unit-5-Utilitydocx/
 Graph-iti. The graph below represents the budget and indifference of Ike, a
rational person who is contemplating buying some combination of Mounds Bars
and Almond Joy Bars. Review the graph and answer the questions that follow.

1. Which point on the graph represents the greatest total utility?

 s

2. Which point represents the least total utility?

 r

3. Can Ike buy at point “s”?

 no

4. Can Ike buy at point “p”?

 no

5. Why shouldn’t Ike buy at point “r”?

 Because “r” provide less utility than q, and both points fall on the budget line.

6. At which point will Ike maximize utility within his budget?

 q

Prepared by: MARY ANN M. DE LA VEGA, PhD. Basic Microeconomics -

Unit V
This study source was downloaded by 100000801932233 from CourseHero.com on 05-12-2022 05:03:40 GMT -05:00

https://www.coursehero.com/file/95665216/Unit-5-Utilitydocx/
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