Name: Wendell Lyn P.

Imbestro
Subject: Micro Economics
Date: November. 04,2023
Time: 1:30-4:30 PM

Midterm- Quiz #1

1. Calculate the Marginal Utility of Utility Schedule I from year I to year 5

Utility Schedule 1
Q TU ∆TU (Change in MU (Marginal
(Consumption) (Total Total Utility) Utility)
Utility)
0 0 - -
1 10 10 10
2 18 8 8
3 24 6 6
4 28 4 4
5 30 2 2
As consumption (Q) increases, Total Utility (TU) also increases. Marginal Utility (MU)
iscalculated as the change in Total Utility (ATU) divided by the change in consumption (AQ).

Formula:

Marginal Utility = Change in Total Utility (ATU)/Change in No. of Units Consumed (AQ)
= (TU-TUi)/(Qf-Qi)

Solution:

MU(year 1) = (TUf - TUi) / (Qf - Qi) MU(year 2) = (TUF - TUI) / (Qf - Qi)
= (10-0) / (1-0) = (18-10) / (2-1) -> 8/1
= (10-0) / (1 - 0) =8
= -> 10
 MU(year 3) = (TUf - Tui) / (Qf - Qi) MU(year 4) = (Tuf - TUi) / (Qf - Qi)
= (24-18) / (3-2) -> 6/1 = (28-24) / (4-3) -> 4/1
=6 =4

MU(year 5) = (TU - TUI) / (Qr - Qi)

= (30-28) / (5-4) -> 2/1
=2

2. Calculate the Marginal Utility of Utility Schedule 2 from year I to year 5

Utility Schedule 2
Q TU ∆TU (Change in MU (Marginal
(Consumption) (Total Total Utility) Utility)
Utility)
0 0 - -
1 12 12 12
2 24 12 12
3 33 9 9
4 40 7 7
5 45 5 5
Total Utility increases with increasing consumption. Marginal Utility is calculated as the change
in Total Utility divided by the change in consumption.

Formula:

Marginal Utility = Change in Total Utility (ATU) / Change in No. of Units Consumed (AQ)
= (TUf-TUi)/(Qf-Qi)
Solution:

MU(year 1) = (TUF - TUi) / (Qf - Qi) MU(year 2) = (TUf - TUi) / (Qf - Qi)
= (12-0) / (1-0)→12 / 1 = (24-12) / (2-1)-12 / 1
= 12 = 12
 MU(year 3) = (TUf-TUi) / (Qf-Qi) MU(year 4) = (TUf - TUi) / (Qf - Qi)
= (33-24) / (3-2 )→9/1 = (40-33) / (4-3)-7/1
=9 =7

MU(year 5) = (TUf - TUi) / (Qf - Qi)

= (45-40) / (5-4)→5/1
=5

3. Calculate the Marginal Utility of Utility Schedule 3 from year 1 to year 5

Utility Schedule 3
Q TU ∆TU (Change in MU (Marginal
(Consumption) (Total Total Utility) Utility)
Utility)
0 0 - -
1 8 8 8
2 14 6 6
3 18 4 4
4 20 2 2
5 20 0 0
Total Utility increases initially but remains constant at a consumption level ot 4. MarginalUtility
is calculated for each level of consumption. It starts decreasing after a point andeventually
becomes zero when TU doesn't change. These utility schedules illustrate how TotalUtility and
Marginal Utility change withdifferent levels of consumption.

Formula:

Marginal Utility = Change in Total Utility (ATU) / Change in No. of Units Consumed (AQ)
= (TUf - TUI) / (QF - Qi)
Solution:

MU(year 1) = (Tuf - TUi) / (Qf - Qi) MU(year 2) = (TUf – Tui) / (Qf - Qi)
= (8-0) / (1-0) 8/1 = (14-8 / (2-1) -> 6/1
=8 =6

MU(year 3) = (TUf - TUI) / (Qf - Qi) MU(year 4) = (TUf - TUi) / (Qf - Qi)
= (18-14) / (3-2) -> 4/1 = (20 - 18) / (4 - 3) -> 2/1
=4 =2

MU(year 5) = (TUf - TUi) / (Qf - Qi)

= (20 - 20) / (5 - 4) -> 0/1
=0