If Kathy consumes one more bottle of soda her total utility will increase by 50 utils. However, in order to purchase one additional bottle of soda she will have to give up consuming three cheeseburgers which currently contribute 75 utils to her total utility. What will happen if she chooses to consume one more bottle of soda? Will Kathy experience a net utility gain or loss? Enter the net utility of this choice in the below space. Indicate a loss with a negative value in your answer. For example, if you have a net utility loss of 8 utils, enter - 8.

Given Information:

Consumption of one more bottle of soda = 50 utils

Consumption of three cheeseburgers = 75 utils

Required Information:

Net utility = ?

Answer:

Net utility = - 25

Explanation:

Total utility of Kathy will increase by 50 utils if she consumes one additional bottle of soda.

But at the same time, if she chooses one additional bottle of soda then she will have to give up consuming three cheeseburgers that will result in the deduction of 75 utils.

So the net utility of Kathy will be

Net utility = 50 - 75

Net utility = - 25

Therefore, Kathy will experience a net utility loss.

The consumption of one more bottle of soda an increase in the total utility = 50 utils

Purchasing an additional bottle of soda Kathy = consumption of three cheeseburgers.

Loss from consuming three cheeseburgers = - 75 utils

To gain a bottle of soda, Kate must lose 3 cheeseburgers.

If Kathy consumes one more unit of soda her total utility = 50 - 75

= - 25 utils.

There will be a loss in the total utility = 25 utils.