Douglas allocates his budget of $24 per week to 3 goods, cereal, books and clothing. Use the
Fantastic news! We've Found the answer you've been seeking!
Question:
- Douglas allocates his budget of $24 per week to 3 goods, cereal, books and clothing. Use the table below to answer the following question
| Quantity | Total Utility of Cereal | Total Utility of Books | Total Utility of Clothing |
| 1 | 50 | 75 | 25 |
| 2 | 90 | 135 | 45 |
| 3 | 120 | 175 | 60 |
| 4 | 140 | 205 | 70 |
| 5 | 155 | 225 | 78 |
- If the price of cereal is $2, the price of books is $3 and the price of clothing is $1, at what point does Douglas maximize his utility? Explain.
Expert Answer:
Posted Date:
