Would the answer to a be 5 books and 1 pizza or 4 books and 3 pizzas? And would the answer for B be 88? Would the answer for c be 4 books and 1 pizza? The table below presents Kent’s marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each.| | Books | MU/P | Pizzas | MU/P ||---|-------|------|--------|------|| 1 | | 30 | | 25 || 2 | | 26 | | 24.5 || 3 | | 24.5 | | 20 || 4 | | 20 | | 16 || 5 | | 17.5 | | 11 || 6 | | 10 | | 8 || 7 | | 5.5 | | 2 |**Questions:**a. How many books and pizzas will Kent purchase if he has $88 to spend?b. How much utility will Kent receive from his purchases in (a)?c. The price of books rises to $20 a book. How do your answers to a and b change?

Price of book=$16 Price of pizza=$8a). PxX+PyY=I16X+8Y=88Putting different number of books and pizza's to equate this equationAt 4 books and 3 pizza's the equation satisfies:16(4)+8(3)=8864+24=8888=88 Kent will purchase 4 books and 3 pizza's if he has spend $88. b. From purchasing of 4 books and 3 pizza's Kent will get: 20+20 utilities From the consumption in a Kent will get 40 utilities from the combination.c. If the price of book $20 and price of pizza remain same at $8 Kent will purchase: 3(20)+3(8)=88 60+24<88 84 close to 88. Now Kent can purchase 3 books and 3 pizza's and left with $4 with him as well. He will get 24.5+20 =44.5 utilities from this bundle.Answer: a. Kent will purchase 4 books and 3 pizza's if he has spend $88. b. 40 utilities. c. Now Kent can purchase 3 books and 3 pizza's and left with $4 with him as well and he will get 24.5+20 =44.5 utilities from this bundle.

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2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 24.5 3. 20 4 20 4 16 17.5 11 10 8 7 5.5 7 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? с. The price of books rises to $20 a book. How do your answers to a and b change? I

2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 24.5 3. 20 4 20 4 16 17.5 11 10 8 7 5.5 7 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? с. The price of books rises to $20 a book. How do your answers to a and b change? I

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Would the answer to a be 5 books and 1 pizza or 4 books and 3 pizzas? And would the answer for B be 88? Would the answer for c be 4 books and 1 pizza?

The table below presents Kent’s marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each.

| | Books | MU/P | Pizzas | MU/P |
|---|-------|------|--------|------|
| 1 | | 30 | | 25 |
| 2 | | 26 | | 24.5 |
| 3 | | 24.5 | | 20 |
| 4 | | 20 | | 16 |
| 5 | | 17.5 | | 11 |
| 6 | | 10 | | 8 |
| 7 | | 5.5 | | 2 |

**Questions:**

a. How many books and pizzas will Kent purchase if he has $88 to spend?

b. How much utility will Kent receive from his purchases in (a)?

c. The price of books rises to $20 a book. How do your answers to a and b change?

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