Consumer's income = $12 $$\begin{array}{l}
\begin{array} { c c c c }
\begin{array} { c }
\
\text { Units of } \
\text { Product }\
\hline
\end{array} & \begin{array} { c }
\
\text { Marginal Utility, X } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c }
\
\text { Marginal Utility, Y } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c }
\text { Marginal Utility, }\
\text { New Product, Z } \
( \text { Price } = \$ 1 )\
\hline
\end{array} \
\text { First } & 12 & 16 & 20 \
\text { Second } & 10 & 14 & 18 \
\text { Third } & 8 & 12 & 16 \
\text { Fourth } & 6 & 10 & 14 \
\text { Fifth } & 4 & 8 & 12 \
\text { Sixth } & 2 & 6 & 10 \
\text { Seventh } & 0 & 4 & 8
\end{array}
\end{array}$$ Refer to the data.Suppose the price of new product Z is $10 rather than $1.This consumer would purchase:
A) some of Z but not as much as if the price were $1.
B) none of Z.
C) less of X,Y,and Z than if the price were $1.
D) more of X,Y,and Z than if the price were $1.

Question

Consumer's income = $12 $$\begin{array}{l}
\begin{array} { c c c c } 
\begin{array} { c } 
\
\text { Units of } \
\text { Product }\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, X } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, Y } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\text { Marginal Utility, }\
\text { New Product, Z } \
( \text { Price } = \$ 1 )\
\hline
\end{array} \
 \text { First } & 12 & 16 & 20 \
\text { Second } & 10 & 14 & 18 \
\text { Third } & 8 & 12 & 16 \
\text { Fourth } & 6 & 10 & 14 \
\text { Fifth } & 4 & 8 & 12 \
\text { Sixth } & 2 & 6 & 10 \
\text { Seventh } & 0 & 4 & 8
\end{array}
\end{array}$$ Refer to the data.Suppose the price of new product Z is $10 rather than $1.This consumer would purchase:
A) some of Z but not as much as if the price were $1.
B) none of Z.
C) less of X,Y,and Z than if the price were $1.
D) more of X,Y,and Z than if the price were $1.

Quizplus · Accepted Answer

The consumer is currently experiencing diminishing marginal utility for each product as they consume more. Therefore, if the price of Z increases from $1 to $10, the marginal utility per dollar for Z would decrease significantly, making it less desirable to purchase compared to X and Y. As a result, the consumer would not purchase any of Z at the higher price of $10.

Consumer's Income = $12 Refer to the Data