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Solve clearly [5] Columns 1 through 4 in the table show the marginal utility that Ricardo would get by purchasing various amounts of products A,
Solve clearly
[5] Columns 1 through 4 in the table show the marginal utility that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $9, $3, $2, and $12 and that Ricardo has an income of $53. Column 1 Column 2 Column 3 Column 4 Column 5 Good MU MU/$ Good MU MU/$ Good MU MU/$ Good MU MU/$ Dollars MU A B C D Saved 1 72 1 24 1 15 1 36 5 2 54 2 15 2 12 2 30 2 4 W 45 3 12 3 3 24 w 4 36 4 9 4 7 4 18 4 2 5 27 5 7 5 5 5 13 5 6 18 6 U 6 4 6 7 6 0.5 7 15 7 2 7 3.5 7 4 7 0.25 8 12 8 1 8 3 8 2 8 0.13 (a) What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? (b) How many dollars will Ricardo choose to saveStep by Step Solution
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