Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasingvarious amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price ofgood A is $18, the price of good B is $6, the price of good C is $4, and the price of good D is $24. Ricardo's income is $106.Column 1Units of A1234B=567Bunits.C= 3 units.MU7254453627181512Unit A4 +5 18Units of B123Column 2145678MU241512Unit B97521+0 6Units of C123Instructions: Enter your answers as whole numbers.a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?A = 4 units.456Unit C7Column 38MU151287543.53Amount ofSavingsGUnits of D124234D-0 units.b. How many dollars will Ricardo choose to save? $c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.56Column 478MU3630241813742Number ofDollarsSaved$1234567Column 58MU543210.50.250.125

There are two conditions that need to be fulfilled when deciding the utility-maximizing bundle. Law…

Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $18, the price of good B is $6, the price of good C is $4, and the price of good D is $24. Ricardo's income is $106. Units of A 1 2 3 4 5 Column 1 C= D= 6 7 8 3 units. 3 units. o units. MU 72 54 45 36 27 18 15 12 Unit A +6 Unita of B 1 2 3 4 .. 5 6 7 8 Column 2 MU 24 15 12 Unit B 9 7 5 2 1 Units of C 1 2 3 4 5 6 Instructions: Enter your answers as whole numbers. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? A= 4 units. в- 7 Unit C + Column 3 8 MU 15 12 8 7 5 4 3 Units of D 1 Amount of Savings 09 24 2 3 4 5 Column 4 6 7 8 b. How many dollars will Ricardo choose to save? $ c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. MU 36 30 24 10 13 7 4 2 Number of Dollars Saved Column 5 $1 2 3 4 5 6 7 8 MU 5 4 3 2 1 0.5 0.25 0.125

Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $18, the price of good B is $6, the price of good C is $4, and the price of good D is $24. Ricardo's income is $106. Units of A 1 2 3 4 5 Column 1 C= D= 6 7 8 3 units. 3 units. o units. MU 72 54 45 36 27 18 15 12 Unit A +6 Unita of B 1 2 3 4 .. 5 6 7 8 Column 2 MU 24 15 12 Unit B 9 7 5 2 1 Units of C 1 2 3 4 5 6 Instructions: Enter your answers as whole numbers. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? A= 4 units. в- 7 Unit C + Column 3 8 MU 15 12 8 7 5 4 3 Units of D 1 Amount of Savings 09 24 2 3 4 5 Column 4 6 7 8 b. How many dollars will Ricardo choose to save? $ c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. MU 36 30 24 10 13 7 4 2 Number of Dollars Saved Column 5 $1 2 3 4 5 6 7 8 MU 5 4 3 2 1 0.5 0.25 0.125

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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