Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A consumer allocates his expenditure between three goods, X, Y and Z. The table shows the consumer's marginal utilities for these goods and their prices.
A consumer allocates his expenditure between three goods, X, Y and Z.
The table shows the consumer's marginal utilities for these goods and their prices.
good X Y Z
marginal utility (units) 50 30 25
price ($) 20 15 10
How should the consumer's expenditure be reallocated in order to maximise his utility?
X Y Z
A more more less
B more less more
C less more less
D less less more
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started