3. Identify the affordable consumption point using the Bang for Your Buck equation for both Maggie and Bart and do Maggie and Bart make the same choice? Why or Why not? Part 1: Utility MaximizationBart and Maggie are Pitt students who are allocating their budget for carrying bags between plasticbags, which cost $0.25 each, and the Pitt ByoBag, which costs $6 each. They each have a budget of $18to cover the cost of carrying bags over the 30 week semester.MAGGIE (Budget = $18)%3DPlastic BagsВyоBagsTotalMU/S(Р-6)QuantityMUQuantityTotalMUMU/SUtilityUtility(P=.25)114414424.0011010.0040.00168244.0012402.008.003180122.0024551.004.00418661.0048700.753.00BART (Budget = $18)Plastic BagsВyoBagsTotalQuantityMUMU/$QuantityTotalMUMU/SUtility(Р-6)Utility(Р 25)112122.00136.0036.00144.002191.501280.000.753.0032761.002495.000.6252.503030.5048105.000.502.00

Given: Budget for plastic bag=$0.25 each Budget for Pitt Byobag=$6 each Budget=$18 Semester=30 week

Answered: Identify the affordable consumption…

Identify the affordable consumption point using the Bang for Your Buck equation for both Maggie and Bart and do Maggie and Bart make the same choice? Why or Why not?

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

3. Identify the affordable consumption point using the Bang for Your Buck equation for both Maggie and Bart and do Maggie and Bart make the same choice? Why or Why not?

Part 1: Utility Maximization
Bart and Maggie are Pitt students who are allocating their budget for carrying bags between plastic
bags, which cost $0.25 each, and the Pitt ByoBag, which costs $6 each. They each have a budget of $18
to cover the cost of carrying bags over the 30 week semester.
MAGGIE (Budget = $18)
%3D
Plastic Bags
ВyоBags
Total
MU/S
(Р-6)
Quantity
MU
Quantity
Total
MU
MU/S
Utility
Utility
(P=.25)
1
144
144
24.00
1
10
10.00
40.00
168
24
4.00
12
40
2.00
8.00
3
180
12
2.00
24
55
1.00
4.00
4
186
6
1.00
48
70
0.75
3.00
BART (Budget = $18)
Plastic Bags
ВyoBags
Total
Quantity
MU
MU/$
Quantity
Total
MU
MU/S
Utility
(Р-6)
Utility
(Р 25)
1
12
12
2.00
1
36.00
36.00
144.00
21
9
1.50
12
80.00
0.75
3.00
3
27
6
1.00
24
95.00
0.625
2.50
30
3
0.50
48
105.00
0.50
2.00

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