Q1: Exercise and Total Utility
The table below shows a consumer's total utility from consuming hours of exercise at the gym.
Given this information, what can be said about this consumer's marginal utility curve for exercise?
Table: Exercise and Total Utility
Hours of Exercise Total Utility Marginal utility
0 0
1 5
2 15
3 23
4 29
5 33
A) Marginal utility initially decreases, but eventually increases as more exercise is consumed.
B) Marginal utility always decreases as more exercise is consumed.
C) Marginal utility initially increases, but eventually decreases as more exercise is consumed.
D) Marginal utility initially increases, but eventually stays constant as more exercise is consumed.
Q2: Consider the following bundles of two ordinary goods, X and Y. Can you rank them from the one that provides the most utility to the least? Explain your reasoning.
Bundle Quantity of X Quantity of Y
A 4 4
B 2 2
C 2 3
D 1 1
Q3: Why is the market for soybeans a better example of perfect competition than the market for cars? Discuss explain your answers.