Exercise: Answer the questions below the table as determined from these data, and where P1 = $2,P2 = $3, P3 = $5, P4 = $10 and the Budget = $86.goodX1123456road78910utilityX110192734404549525455goodX2TREASCroad245678910utilityX21322303640424343.543.7543.85goodX3TAMANToad234568910utilityX32037526267697070.170.1170.111goodX4H68L922546710utilityX4366793113127135137138138.1138.11 1.What is the optimal allocation of each of the goods within budget?2. What is the marginal rate of substitution between X2 and X3 atthat optimal position?3.What is the MRS between X1 and X4 at that position?4. What is the "bang for the buck" at this optimum?5. Draw an indifference curve in X3 - X4 space showing 140 utils.

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1. What is the optimal allocation of each of the goods within budget? 2. What is the marginal rate of substitution between X2 and X3 at that optimal position? 3. What is the MRS between X1 and X4 at that position?

1. What is the optimal allocation of each of the goods within budget? 2. What is the marginal rate of substitution between X2 and X3 at that optimal position? 3. What is the MRS between X1 and X4 at that position?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1.
What is the optimal allocation of each of the goods within budget?
2. What is the marginal rate of substitution between X2 and X3 at
that optimal position?
3.
What is the MRS between X1 and X4 at that position?
4. What is the "bang for the buck" at this optimum?
5. Draw an indifference curve in X3 - X4 space showing 140 utils.

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