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2) Suppose the price of a bag of popcorn is $1, and the price of a candy bar is $0.50 . Given the information in

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2) Suppose the price of a bag of popcorn is $1, and the price of a candy bar is $0.50 . Given the information in Tables 1 and 2, complete Table 3 below, where MU/P means marginal utility divided by price , which is equivalent to marginal utility per dollar spent Table 3 Bags of Popcorn MU/P Number of Candy Bars MU/P 1 1 2 2 3 3 4 4 5 5 6 6 Amy's weekly allowance is $4. She spends all of her allowance on candy bars and popcorn . She is rational Using your answers in the tables above , calculate the following , assuming she spends all of her allowance on candy bars and popcorn 3) To maximize her utility, how many bags of popcorn and how many candy bars will she consume per week? 4) What is the general formula for the utility maximization condition ? 5) Show that the utility maximization condition holds (is satisfied ) for the amount of candy and popcorn that she chooses (your answer from Q3 ). 6) What is her total utility from choosing the combination of candy and popcorn you described in Q3 ? 7) If instead Amy spends all of her allowance on popcorn , calculate her total utility from this choice . Price does not mean total expenditure means price

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