1. The table above shows Theresa's marginal utility from bagels and toy cars. a. What is her total utility from purchasing three toy cars? b. Theresa's weekly income is $11, the price of a bagel is $2, andn the price of a toy car is $1. What quantity of toy cars and bagels will maximize Theresa's utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis.2. Assume that the price of wheat, an input for the production of bagels, increases. Will Theresa's demand for bagel increase, decrease, or not change? Explain.3. Suppose that Theresa's income elasticity for bagels is -0.2. Does the value of Theresa's income elasticity indicate that bagel are normal goods, inferior goods, substitutes, or complements?4. Suppose that when the price of toy cars increases by 10%, Theresa buys 5% fewer toy cars and 4% less of a different toy, blocks. Calculate the cross-price elasticity for toy cars and blocks and indicate if it is positive or negative.

Theresa consumes both bagels and toy cars. Quantity of Marginal Utility Quantity of Marginal Utility Bagels from Bagels (Utils) Toy Cars from Toy Cars (Utils) 1 8 1 10 2 7 2 8 3 6 3 6 4 5 4 4 5 4 5 3 6 3 6 2 1. The table above shows Theresa's marginal utility from bagels and toy cars. a. What is her total utility from purchasing three toy cars? b. Theresa's weekly income is $11, the price of a bagel is $2, andn the price of a toy car is $1. What quantity of toy cars and bagels will maximize Theresa's utility if she spends her entire weekly income on bagels and toy cars? Explain your answer using marginal analysis. 2. Assume that the price of wheat, an input for the production of bagels, increases. Will Theresa's demand for bagel increase, decrease, or not change? Explain. 3. Suppose that Theresa's income elasticity for bagels is -0.2. Does the value of Theresa's income elasticity indicate that bagel are normal goods, inferior goods, substitutes, or complements? 4. Suppose that when the price of toy cars increases by 10%, Theresa buys 5% fewer toy cars and 4% less of a different toy, blocks. Calculate the cross-price elasticity for toy cars and blocks and indicate if it is positive or negative