Microeconomics help please (urgent)

You go to an auction and set a maximum price of $100 you are willing to bid on an item. However, you are fortunate and purchase it for $50.

1) Does the lower price alter the marginal utility you originally placed on the item?
2) Is your potential total utility increased because of the lower price?

  1. 👍 0
  2. 👎 0
  3. 👁 100
asked by David
  1. 1) Under the most common utility functions, No. Price paid is independent of the marginal utility received.
    2) Yes, Instead of getting the item for $100, you get the item plus have $50 to spend on something else.

    (Note: in future posts, I suggest you let us know what you think the answer is. We would much rather critique your thinking than to just give you the answer right out.)

    1. 👍 0
    2. 👎 0
  2. Thank you. I will remember the advice in the future:)

    1. 👍 0
    2. 👎 0
    posted by David

Respond to this Question

First Name

Your Response

Similar Questions

  1. econ

    The FCC is planning to auction wireless spectrum rights, with the goal of maximizing the revenue that it receives from the auction. These rights will almost certainly be used to support wireless communications devices, such as

    asked by Tiffany on June 9, 2008
  2. econ

    The FCC is planning to auction wireless spectrum rights, with the goal of maximizing the revenue that it receives from the auction. These rights will almost certainly be used to support wireless communications devices, such as

    asked by Tiffany on June 10, 2008
  3. Microeconomics (margin Utility) need clarification

    Someone was kind enough to help me with this question, but i was still confused on how they helped me with the first part of my question. The original question was: You go to an auction and set a maximum price of $100 you are

    asked by David on October 15, 2008
  4. 8 math

    A painting by a famous impressionist sold through an auction house where the sale price is not publicly disclosed. The auction house works on a commission rate if 10%. They earned a commission of $400,000 on this painting. What

    asked by Anonymous on April 25, 2010
  5. maths

    There is an auction for a house, with a List Price of $100K. There are only two bidders, who bid randomly, one after another. Their bids are in the $0 to $100K range. They don’t know what the other person bid (even if they did,

    asked by nkm on April 12, 2013
  6. Micoreconomics

    In recent years, the Internet auction firm eBay has sougth to make its auction technology the favorite of software programmers, and it has begun licensing its technology to other Web sites. The company's managers have pulicly

    asked by Tina on July 8, 2011
  7. Business Mathematics

    A local travel agent is organizing a charter ride to a well known resort. The agent has quoted a price of $30 per person if 100 or fewer sign up for the ride. For every person over the 100, the price of the ticket for all will

    asked by Arslan on October 15, 2016
  8. maTHS

    A shop reduces al its 30% in a closing down scale. What is the original price of a television now priced at £175? Explain your working carefully. Do I do 175/ 100 x 30 = £53 £175 + £53 = £228 is the original price of the

    asked by sarah on June 8, 2007
  9. Maths

    If the price of a television set is #Y and the price of a video camera is one-third the price of a television set.If a customer pays N28000 for the items,find the price of a television set

    asked by Maimunat on April 24, 2017
  10. Language

    Combine ,,Use (and) or (or) to join the subjects. 1/ The raffle will raise money. The auction will raise money. The raffle and the auction will raise money. 2/ Food and drinks will make the party fun.Games and prizes will make the

    asked by Nin on October 19, 2014

More Similar Questions