Question

Use the black point (plus symbol) to show the price and quantity combination favored by Manuel. Use the grey point (star symbol) for Shen. Use the purple point (diamond symbol) for Antonio.

a) True
b) False

Answer 1

The student's question evaluates total utility for different combinations of goods. By referencing a utility table, one identifies the utility provided by each good, combines them for a total utility, and then compares these across combinations to determine the most preferred scenario.

Step-by-step explanation:

The student's question seems to be related to an Economics concept dealing with total utility, which is a term used to describe the total satisfaction received from consuming a certain amount of goods or services. Here's a step-by-step explanation based on the provided steps:

• First, observe a given point on a utility table to see the combination of goods consumed. In the example, at point Q, José consumes three T-shirts and two movies.
• Next, reference the provided utility table to find the utility value of each good. In the example, three T-shirts have a utility of 63, and two movies have a utility of 31.
• Add the utility values of the goods to determine the total utility. For point Q, the total utility would be 94 (63 for T-shirts + 31 for movies).
• To determine the most preferred combination, you would compare the total utilities of different points, finding which has the highest total utility. In one of the examples provided, point S gives the highest total utility at 103.

Finally, make decisions based on the concept of marginal utility, which involves comparing the gain or loss in utility when changing consumption. For instance, moving from point P to Q may result in a net gain in utility, indicating a favorable trade-off.