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1.You are giving a $26 gift certificate at Grocery Market A.At this grocery store you can spend it on either bags apples or oranges. A
1.You are giving a $26 gift certificate at Grocery Market A.At this grocery store you can spend it on either bags apples or oranges. A bag of apples cost $2 and oranges $5. The marginal utilities derived from each product are as shown in the following table.
Number of Items
MU of Apples
MU of Oranges
1
60
150
2
50
140
3
40
120
4
30
100
5
20
80
6
10
70
7
5
50
8
0
20
A.Which combination would give you the maximum utility out of spending $26? Must show work.
B.Calculate the total utility from the maximum utility output. Must show work.
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