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2. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video

2. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases.

Quantity Price per download MU per download MU/$
Music downloads 3 $3 60 20
Video downloads 2 $3 45 15

As an assignment for her microeconomics course, Matilda used the marginal utilities that she gave to her third music download and her second video download to complete the Experiment Tally Sheet below. Her available budget was $19.00.

Total money spent on music: $9.00

Total money spent on videos: $6.00

Total money spent: $15.00

Total budget remaining: $4.00

Marginal utility per dollar for music downloads of the last item purchased: 20 mu/$

Marginal utility per dollar for video of the last item purchased: 15 mu/$

Using Matilda's Experiment Tally Sheet, answer the following questions. (You will need to enter marginal utility scores and calculate marginal utility per dollar amounts, based upon the law of diminishing marginal utility, to be able to answer all of the questions below.)

  1. A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good (MU/$). Is Matilda maximizing her utility by choosing the combination of 3 music downloads and 2 video downloads, based upon the optimal consumption rule? Explain your answer.

(Enter your response here.)

  1. Should Matilda consume one more video download, resulting in a final consumption bundle of 3 music downloads and 3 video downloads, to move her closer to her optimum utility? Explain your answer.

(Enter your response here.)

  1. Should Matilda consume one less music download and one more video download, resulting in a final consumption bundle of 2 music downloads and 3 video downloads, to move her closer to her optimum utility? Explain your answer.

(Enter your response here.)

  1. Should Matilda consume one more music download, resulting in a final consumption bundle of 4 music downloads and 2 video downloads, to move her closer to her optimum utility? Explain your answer.

(Enter your response here.)

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