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3. The table below shows the utility (in utils) that a consumer (Arthur) receives from purchasing two goods (cell phones & sunglasses). Cell Phones Sunglasses Utility from Cell Phones (Utils) Quantity of Sunglasses| Utility from Sunglasses Quantity of Cell Phones |50 | 80 1 40 |60 2 100 3 |68 4 110 4 75 Assume cell phones cost $100 and a pair of sunglasses cost $50 and that Arthur's budget is $400. a. Calculate Arthur’s marginal utility for cell phones & sunglasses at each qty. b. Calculate Arthur’s mu per $ for cell phones and sunglasses at each quantity. c. Determine the optimal consumption bundle of cell phone and sunglasses at these prices. d. What is the total amount of utility from the consumption bundle in part c? |Assume the price of cell phones falls to $50 and the price of sunglasses remains the same while your budget falls to $350.. e. Determine the new optimal consumption bundle of cell phone and sunglasses at these prices.

3. The table below shows the utility (in utils) that a consumer (Arthur) receives from purchasing two goods (cell phones & sunglasses). Cell Phones Sunglasses Utility from Cell Phones (Utils) Quantity of Sunglasses| Utility from Sunglasses Quantity of Cell Phones |50 | 80 1 40 |60 2 100 3 |68 4 110 4 75 Assume cell phones cost $100 and a pair of sunglasses cost $50 and that Arthur's budget is $400. a. Calculate Arthur’s marginal utility for cell phones & sunglasses at each qty. b. Calculate Arthur’s mu per $ for cell phones and sunglasses at each quantity. c. Determine the optimal consumption bundle of cell phone and sunglasses at these prices. d. What is the total amount of utility from the consumption bundle in part c? |Assume the price of cell phones falls to $50 and the price of sunglasses remains the same while your budget falls to $350.. e. Determine the new optimal consumption bundle of cell phone and sunglasses at these prices.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...
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3. The table below shows the utility (in utils) that a consumer (Arthur) receives from purchasing two goods (cell phones & sunglasses). Cell Phones Utility from Cell Phones (Utils) Sunglasses Utility from Sunglasses Quantity of Cell Phones Quantity of Sunglasses 1 50 1 40 80 2 60 3 100 3 68 4 110 4 75 Assume cell phones cost $100 and a pair of sunglasses cost $50 and that Arthur's budget is $400. a. Calculate Arthur's marginal utility for cell phones & sunglasses at each qty. b. Calculate Arthur's mu per $ for cell phones and sunglasses at each quantity. c. Determine the optimal consumption bundle of cell phone and sunglasses at these prices. d. What is the total amount of utility from the consumption bundle in part c? Assume the price of cell phones falls to $50 and the price of sunglasses remains the same while your budget falls to $350.. e. Determine the new optimal consumption bundle of cell phone and sunglasses at these prices.
Transcribed Image Text:3. The table below shows the utility (in utils) that a consumer (Arthur) receives from purchasing two goods (cell phones & sunglasses). Cell Phones Utility from Cell Phones (Utils) Sunglasses Utility from Sunglasses Quantity of Cell Phones Quantity of Sunglasses 1 50 1 40 80 2 60 3 100 3 68 4 110 4 75 Assume cell phones cost $100 and a pair of sunglasses cost $50 and that Arthur's budget is $400. a. Calculate Arthur's marginal utility for cell phones & sunglasses at each qty. b. Calculate Arthur's mu per $ for cell phones and sunglasses at each quantity. c. Determine the optimal consumption bundle of cell phone and sunglasses at these prices. d. What is the total amount of utility from the consumption bundle in part c? Assume the price of cell phones falls to $50 and the price of sunglasses remains the same while your budget falls to $350.. e. Determine the new optimal consumption bundle of cell phone and sunglasses at these prices.
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