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The table shows the total utility (TU) that James receives from consuming different amounts of two goods X and Y, per month. Quantity TUx MUx
- The table shows the total utility (TU) that James receives from consuming different amounts of two goods X and Y, per month.
| Quantity | TUx | MUx | MUx/Px | TUy | MUy | MUy/Py |
| 0 | 0 |
|
| 0 |
|
|
| 1 | 50 |
|
| 75 |
|
|
| 2 | 88 |
|
| 117 |
|
|
| 3 | 121 |
|
| 153 |
|
|
| 4 | 150 |
|
| 181 |
|
|
| 5 | 175 |
|
| 206 |
|
|
| 6 | 196 |
|
| 225 |
|
|
| 7 | 214 |
|
| 243 |
|
|
| 8 | 229 |
|
| 260 |
|
|
| 9 | 241 |
|
| 276 |
|
|
- Fill in the other columns of the table by calculating the marginal utilities for goods X and Y and the ratios of marginal utilities to price for the two goods. Assume that the price of both goods X and Y is $3.
- If James allocates $30 to spend on both goods, how many units will he buy of each?
- How much will James spend on each good at the utility maximizing combination?
- How much total utility will James experience by buying the utility-maximizing combination?
- Suppose the price of good Y increases to $6. How many units of X and Y will he buy to maximize his utility now?
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Architects Of Austerity International Finance And The Politics Of Growth
Authors: Aaron Major
1st Edition
0804790736, 9780804790734
