Total and marginal monetary utility Shen enjoys drinking milk. The following table contains information about Shen’s total utility from milk. Fill…
1. Total and marginal monetary utility
Shen enjoys drinking milk. The following table contains information about Shen’s total utility from milk. Fill in the missing cells in the table.
Milk
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Marginal Utility
(Gallons per week)
(TU, $)
(MU, $)
0$0 16116228337443546647
On the following graph, use the green points (triangle symbol) to plot Shen’s total utility (TU) curve if he consumes zero, one, two, three, four, five, or six gallons of milk per week
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Remember to plot from left to right.
Total Utility
0
1
2
3
4
5
6
50
45
40
35
30
25
20
15
10
5
0
TOTAL UTILITY (Dollars)
QUANTITY (Gallons)
Suppose that the price of a gallon of milk is $6.
On the following graph, use the blue points (circle symbol) to plot Shen’s marginal utility (MU) curve from consuming his first six gallons of milk per week. Also, place the orange line (square symbols) on the graph to show the price of a gallon of milk.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Remember to plot from left to right.
Marginal Utility
Price
0
1
2
3
4
5
6
16
14
12
10
8
6
4
2
0
MARGINAL UTILITY AND PRICE PER GALLONS
QUANTITY (Gallons)
When the price of a gallon of milk is $6, Shen should purchase of milk to maximize his total net utility.
For Shen, increasing his consumption of milk results in marginal utility of the additional unit.