Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Consider the following set of marginal and total utilities where the price per bottle of beer is $3, the price per slice of pizza

image text in transcribed
1. Consider the following set of marginal and total utilities where the price per bottle of beer is $3, the price per slice of pizza is $2, and a consumer has $20 in total to spend. Beer (x) Pizza (y) Marginal Total Marginal Total Utility Utility Utility Utility From From From From Units Beer Beer Pizza Pizza 42 42 32 32 2 30 72 22 54 3 20 92 14 68 4 12 104 8 76 5 6 110 6 82 2 112 UT 87 0 112 0 87 How much of each good will the consumer purchase to maximize utility? What will the consumer's marginal utility per last dollar spent be for each item? What is the consumer's total utility? 2. Now the prices stay the same, but the consumer has $35 in total to spend. How much of each good will the consumer purchase to maximize utility? What will the consumer's marginal utility per last dollar spent be for each item? What is the consumer's total utility

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Economics questions