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(8, 12) thx Sam allocates his income between milk and cereal. Milk Milk costs $2.50 per gallon, and cereal costs $5.00 per box. Sam MU

(8, 12) thx

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Sam allocates his income between milk and cereal. Milk Milk costs $2.50 per gallon, and cereal costs $5.00 per box. Sam MU milk Cereal (gallons) has $50 each week to spend on both goods. The table shows (boxes) MU cereal Sam's marginal utility (MU) for varying levels of milk and 0 0 cereal consumption. 2 16 135 4 15 2 Given the information provided, how should Sam allocate 120 6 his income between milk and cereal to arrive at the optimal 13 3 105 consumption bundle? 8 9 4 90 10 8 5 75 12 7 6 60 Sam should purchase gallons of milk 14 6 7 45 16 5 8 30 18 4 9 12 and boxes of cereal. 20 3 10 8

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