mar 75 I1 2 0, 12 2 0 s.t. 8* +4* r, <1600 • The marginal utility of good 1: MU, = .25 • The marginal utility of good 2: MU2 = 75 × Equation Description: A consumer is attempting to maximize utility subject to a budget constraint.Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4; and, consumer income is $1600. Marginal utility of good 1. equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the 75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is.75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O 79.2 utils O None of the above O 19.9 utils 6.8 utils O 191.7 utils O 333.3 utils

mar 75 I1 2 0, 12 2 0 s.t. 8* +4* r, <1600 • The marginal utility of good 1: MU, = .25 • The marginal utility of good 2: MU2 = 75 × Equation Description: A consumer is attempting to maximize utility subject to a budget constraint.Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4; and, consumer income is $1600. Marginal utility of good 1. equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the 75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is.75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O 79.2 utils O None of the above O 19.9 utils 6.8 utils O 191.7 utils O 333.3 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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