Each unit of good X costs $1, and each unit of good Y costs $2. The following table contains information on Felix" Units of Good X 2 3 4 5 Total Utility of Good X (Utils) 14 26 37 46 51 Units of Good Y 1 To maximize his utility, Felix should purchase 2 3 4 5 Suppose Felix spends a total of $8 on good X and good Y each week. Total Utility of Good Y (Utils) 30 56 80 of good X and Siven his budget, the maximum total utility Felix can obtain from the two goods is 100 116 of good Y. utils.

Each unit of good X costs $1, and each unit of good Y costs $2. The following table contains information on Felix" Units of Good X 2 3 4 5 Total Utility of Good X (Utils) 14 26 37 46 51 Units of Good Y 1 To maximize his utility, Felix should purchase 2 3 4 5 Suppose Felix spends a total of $8 on good X and good Y each week. Total Utility of Good Y (Utils) 30 56 80 of good X and Siven his budget, the maximum total utility Felix can obtain from the two goods is 100 116 of good Y. utils.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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am. 113.
Suppose that Mr. Umais spends his entire income on good X and Y. The marginal utility of each commodity is recorded in the table below. If the price of X is Rs. 100 and price of Y is 500 and mr. Umais has an income of Rs. 1000 per month. How many units of each good should he purchase? Units of X and Y MU x MU y 1 20 50 2 18 45 3 16 40 4 13 35 5 10 30 6 6 25 7 4 20 8 2 15 a. (X, Y) = (5, 0) b. (X, Y) = (5, 5) c. (X, Y) = (0, 5) d. cannot be determined
Units of the Good 0 1 5678AWN2 3 4 Total Utility Total Utility of X of Y 0 0 620 1740 1120 3030 1500 3960 1820 4710 2080 5280 2300 5730 2460 6060 2580 6300 For the next 3 questions, assume that an individual consumes two goods X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The prices of X and Y are, respectively, $20 and $30. If the consumer buys the fourth unit of X the Marginal Utility per Dollar Spent on X is 16 I If the consumer has $210 to spend on X and Y, the utility-maximizing bundle is The minimum budget necessary to move to a higher equilibrium consumption of X and Y is $ unit(s) of X and unit(s) of Y.
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Joe is currently in consumer equilibrium by consuming cheese and crackers, such that the last cracker consumed yielded 8 utils and the last piece of cheese consumed yielded 12 utils. Assume the price of crackers is two cents per cracker and the price of cheese is three cents per piece. If the price of crackers increases to four cents, Joe should his consumption of crackers and his marginal utility from crackers will and also his consumption of cheese and his marginal utility from cheese will (Assume he is in the downward sloping portion of the MU curve.) Ο Ο Ο decrease; increase; increase; decrease increase; increase; increase; increase increase; decrease; increase; decrease increase; increase; decrease; decrease
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