Econ 200 HW #3 Due

Name: _________________________________

The following table gives a hypothetical total utility schedule for the Cookie Monster. Utility is

measured in cents.

Cookies eaten TU, cents MU, cents

0 0 ---

1 100

2 200

3 275

4 330

5 20

6 360

7 360

a. Fill out the missing entries in the table. How many cookies will the Cookie Monster buy and eat if the price of each cookie is 5 cents? Explain what makes you think so.

b. How many cookies will the Cookie Monster eat if the price of each cookie is 50 cents?

c. Given P=50c and your answer to part b above, what is the consumer surplus the Cookie Monster receives from the LAST cookie he buys and eats?

d. What is the TOTAL consumer surplus the Cookie Monster gets from ALL the cookies he buys when

P=50c? (Once again, take your answer to part b into account.)

e. On the graph paper also attached, graph the Cookie Monsters total utility and marginal utility. Due to the difference in the order of magnitude, make them two separate graphs. In each case, put cookies on

the horizontal axis and utility on the vertical.

f. Do the assigned readings from Chapter 3 and answer the following question:

Which of the two graphs youve plotted best represents the Cookie Monsters DEMAND for cookies?

Econ 200 HW #3 Due