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Use the following table to answer the questions, where Q is quantity, MBa is the marginal benefit from good A, and MBb is the marginal
Use the following table to answer the questions, where Q is quantity, MBa is the marginal benefit from good A, and MBb is the marginal benefit from good B. Assume that the price of A is $25 and the price of B is $40.
Q. MBa (MP/p)a MBb (MP/p)b
1 200 240
2 175 200
3 150 160
4 125 120
5 100 80
6 75 40
Given a budget of $245, what is the optimal mix of goods A and B? At this mix, what is your total benefit?
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