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7. Hugo wants to buy videos and CDs. The price of a video is $5. The price of a CD is $10. Hugo has $50
7. Hugo wants to buy videos and CDs. The price of a video is $5. The price of a CD is $10. Hugo has $50 of income to spend. His utility values are listed below. Calculate the marginal utility of each quantity, then calculate the marginal utility per dollar for each good. Illustrate Hugo's budget line with videos on the horizontal axis and CDs on the vertical axis. Then draw a marginal utility per dollar graph to predict Hug's optimal bundle. Utility of Marginal Quantity utility of Marginal Marginal Quantity Marginal of videos videos utility of utility per of CDS CDS utility of utility per videos dollar of CDS dollar of videos CDS 2 70 1 130 150 G 180 210 220 250 10 250 300
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