Table 10-2
Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2. Holding prices constant, when Keira's income changes from $18 to $23, what happens to her total utility and to the marginal utilities of the last cup of soup and the last sandwich purchased?

Question

Table 10-2
  Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2. Holding prices constant, when Keira's income changes from $18 to $23, what happens to her total utility and to the marginal utilities of the last cup of soup and the last sandwich purchased?

Quizplus · Accepted Answer

When Keira's income increases, she can afford more goods, leading to an increase in total utility. However, as she consumes more of each good, the marginal utility of the last unit consumed typically decreases due to the law of diminishing marginal utility.

Table 10-2 Table 10-2 Above Shows Keira's Utility from Soup