Question

Margo buys music CDs and movies on DVDs. The table below shows her total utility from each
good.
Quantity
(per year)
Utility from
CDs
(units)
Utility from
DVDs
(units)
0 0 0
1 50 70
2 92 130
3 126 180
4 152 220
5 170 250
a) Draw graphs showing Margo's utility from music CDs and from movies on DVDs. (5 marks)
b) Compare the two utility graphs. Describe Margo's preferences. (4 marks)
c) Draw graphs that show Margo's marginal utility from music CDs and from movies on DVDs

Answer 1

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Joan Robinson's growth model clearly incorporates the problem of population growth in a developing economy and analyses the effects of population on the rate of capital accumulation and growth of output.

The rate at which the labour is used depends upon the supply of capital and that of labour.