1)This module considers important concepts in economics: Total Utility, Marginal Utility, Diminishing Marginal Utility, and Utility Maximization within a budget constraint. These tools can be applied to personal decision making, particularly the consumption choices we make. Microeconomics often considers rational optimizing behavior by individuals, including consumers.

Use the Law of Diminishing Marginal Utility to discuss why Market Demand has to have a downward slope. In other words, in order for consumers to demand a higher quantity of an item, its price must fall. Also use the Law of Diminishing Marginal Utility to explain why consumers often prefer to purchase a variety of goods and services (in other words, we are unlikely to fill a grocery cart with many units of the exact same product).

Finally, use the utility optimizing condition that the ratio of Marginal Utility to Price for any good has to be the same across all goods to justify why it may be rational behavior to buy an item that is expensive compared to other items.

Discuss these concepts using examples from your own experience and observations.

2)Let's explore the relationship between Marginal Product and Marginal Cost. Specifically, we have learned about Diminishing Marginal Product in the short run, when quantities of at least some inputs such as the facility and its capital are fixed. We also want to explore the connection between the downturn in Marginal Product and the eventual upturn in Marginal Cost, which is the additional cost from producing one additional unit of output.

Look at the following table below linking quantity of output to quantity of labor units. From this table you can calculate Marginal Product, which is the change in total product as one more unit of labor is added in the short run when quantities of other inputs are assumed fixed. If we know how much each unit of labor costs, we can map output and marginal product into Variable Costs and Marginal Cost. For our purposes assume that labor is the only variable input in the short run and that each unit of labor costs $3. Using this information and the table below, calculate Marginal Product and Marginal Cost and discuss how the peak and then decline in Marginal Product is related to the minimum and subsequent increase in Marginal Cost. Hint: Marginal Cost is the additional cost of producing one additional unit of output.

Units of Labor Input	Quantity of Output	Marginal Product	Marginal Cost
0	0
1	3
2	7
3	12
4	16
5	19
6	21
7	22

Share your methods and calculations for Marginal Product and Marginal Cost and be specific in discussing the link between the two.