Instructions: Enter your answers as a whole number. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? 4 units of A 1 8 units of B 3 units of C units of D b. How many dollars will Ricardo choose to save? $ 17 * c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. ($ 36 O 4 + $ 24 8 x 1 8 + $ 8. 3. + $ 24 O x 3 + $ 17 281 O
Instructions: Enter your answers as a whole number. a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? 4 units of A 1 8 units of B 3 units of C units of D b. How many dollars will Ricardo choose to save? $ 17 * c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule. ($ 36 O 4 + $ 24 8 x 1 8 + $ 8. 3. + $ 24 O x 3 + $ 17 281 O
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Columns 1 through 4 in the following 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 prices of A, B, C,
and D are, respectively, $36, $12, $8, and $24 and that Ricardo has an income of $281.
Column 1
Column 2
Column 3
Column 4
Column 5
Units of
Units of
Units of
Units of
Number of
MU
MU
MU
MU
MU
Good A
Good B
Good C
Good D
Dollars Saved
1
72
1
24
1
15
1
36
1
2
54
15
12
2
30
2
4
45
12
24
4
36
4
4
7
4
18
4
2
27
7
5
13
1
18
6.
6.
4
6.
7
6.
0.50
7
15
7
2
7
3.5
7
4
7
0.25
12
8
1
3
8
2
8
0.13
Transcribed Image Text:Instructions: Enter your answers as a whole number.
a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
4
units of A
1
* units of B
units of C
3
units of D
b. How many dollars will Ricardo choose to save?
17
c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
36
4
+ $
24
1 *
+ $
8
3
+ $
24
3
17
2$
281
%24
%24
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