Question

calculate marginal utility and average utility from the information given in the below quantity consumed 1 total utility 20 quantity consumed 2 utility 35

Answer 1

Answer:

by 5 per

cent, what will happen to the demand for the other good, holding other factors constant?

(5 Marks)

3.b. Calculate Marginal Utility and Average Utility from the information given in the below

table: (5 Marks)

Quantity Consumed Total Utility

1 20

2 35

3 47

4 55

5 60

Answer 2

Quantity Consumed   Total Utility  Marginal utility      Average utility

      1                                 20                  20                         20

      2                                35                   15                         17.5

      3                                47                   12                         15.67

      4                                55                   8                          13.75

      5                                60                   5                          12

Explanation:

Given:

quantity consumed 1 total utility 20, quantity consumed 2 utility 35,quantity consumed 3 utility 47,quantity consumed 4 utility 55 and quantity consumed 5 utility 60.

To Find.

Marginal utility and average utility  for quantity consumed 1 total utility 20, quantity consumed 2 utility 35,quantity consumed 3 utility 47,quantity consumed 4 utility 55 and quantity consumed 5 utility 60.

Formula Used:

Marginal Utility= change in total utility divided by change in quantity consumed

Average Utility= total utility divided by total quantity consumed

Solution:

For  quantity consumed 1 total utility 20.

Quantity consumed= 1

Total utility =20

Marginal Utility= change in total utility divided by change in quantity consumed

                         $=\frac{20}{1} =20$

Average Utility= total utility divided by total quantity consumed

                         $=\frac{20}{1} =20$

For  quantity consumed 2 total utility 35.

Quantity consumed= 2

Total utility =35

Marginal Utility= change in total utility divided by change in quantity consumed

                         $=\frac{35-20}{2-1} =\frac{15}{1} =15$

Average Utility= total utility divided by total quantity consumed

                         $=\frac{35}{2} =17.5$

For  quantity consumed 3 total utility 47.

Quantity consumed= 3

Total utility =47

Marginal Utility= change in total utility divided by change in quantity consumed

                         $=\frac{47-35}{3-2} =\frac{12}{1} =12$

Average Utility= total utility divided by total quantity consumed

                         $=\frac{47}{3} =15.67$

For  quantity consumed 4 total utility 55.

Quantity consumed= 4

Total utility =55

Marginal Utility= change in total utility divided by change in quantity consumed

                         $=\frac{55-47}{4-3} =\frac{8}{1} =8$

Average Utility= total utility divided by total quantity consumed

                         $=\frac{55}{4} =13.75$

For  quantity consumed 5 total utility 60 .

Quantity consumed= 5

Total utility =60

Marginal Utility= change in total utility divided by change in quantity consumed

                         $=\frac{60-55}{5-4} =\frac{5}{1} =5$

Average Utility= total utility divided by total quantity consumed

                         $=\frac{60}{5} =12$

Thus,

Quantity Consumed   Total Utility  Marginal utility      Average utility

      1                                 20                  20                        20

      2                                35                   15                        17.5

      3                                47                   12                        15.67

      4                                55                   8                         13.75

      5                                60                   5                         12

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