Chapter 8

1) What does "diminishing marginal utility" mean? Explain with an example. (5 pts)

2) Explain the Utility-maximizing rule and the Paradox of Value? (5 pts)

3) "Water is very inexpensive. Thus the marginal and total utility of water is small." Explain the statements. (5 pts)

4) Explain why does gold, which is a relatively nonessential item, has a higher price than water, which is essential to life? (5 pts)

5)Amy has the total utility values given below for DVD rentals a week. Complete the table by calculating her marginal utilities. (5 pts)