Jamie's Marginal Utility from Muffins and from Doughnuts (In Utils)

question 18

Multiple Choice

Jamie's marginal utility from muffins and from doughnuts (in utils) is shown below. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1. $$\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Muffins } \\\text { Per Day }\end{array} & \begin{array} { c } \text { Marginal Utility } \\\text { Per Muffin }\end{array} & \begin{array} { c } \text { Doughnuts } \\\text { Per Day }\end{array} & \begin{array} { c } \text { Marginal Utility } \\\text { Per Doughnut }\end{array} \\\hline 1 & 40 & 2 & 20 \\\hline 2 & 30 & 4 & 15 \\\hline 3 & 20 & 6 & 10 \\\hline\end{array}$$ If Jamie consumes 3 muffins a day, then what is her marginal utility per dollar spent on the third muffin?

• A)10
• B)20
• C)30
• D)40

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Definitions:

Differentiate

To establish a distinct, unique position in the marketplace by highlighting differences from competitors.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Charging Different Prices

Practice of setting different prices for the same product or service in different markets or to different customers, often based on demand, purchase volume, or buyer characteristics.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price.