Examine how the concept of utility affects purchasing decisions by individuals and consumer surplus. Assessment In this assessment, you will demonstrate your understanding of marginal utility, Price Elasticity of Demand, and understanding the difference between Price Elasticity of Demand and Income Elasticity of Demand. We all subconsciously assign “scores” to what we are considering to purchase, based on our expected level of “satisfaction” (Marginal Utility) with that purchase. When making simultaneous pairs of purchases, again we subconsciously compare the amount of “satisfaction” (Marginal Utility) that we will receive from the pair of purchases. To decide on the “ideal” combination of these two purchases, we expect that the last dollar we spend on each of the items will give us the “same” satisfaction per dollar (Marginal Utility per dollar). Further, we know that the MORE of an item that we get, the next one we get will give us LESS “satisfaction” (Marginal Utility) than the last one gave us (the Law of Diminishing Marginal Utility). Using what you have learned about Marginal Utility and Marginal Utility per dollar, answer the following questions. Download the Module 5 Assessment Template to get started. Assessment Checklist: Review the Module 5 Assessment rubric to ensure your work covers all criteria on which you will be graded. Make sure your assignment is in the Word template and saved with the file name specified in the general instructions.


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