Ray buys only hamburgers and bottles of rootbeer out of a weekly income of$100. He currently consumes 20 bottles of rootbeer per week, and his marginalutility of root beer is 6. The price of root beer is $2per bottle. Currently, he alsoconsumes 15 hamburgers per week, and hismarginal utility of a hamburger is 8.Is Ray maximizing utility at his currentconsumption basket? If not, should he buymore hamburgers each week, or fewer?

Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good…

Answered: marginal utility of a hamburger is 8. s…

marginal utility of a hamburger is 8. s Ray maximizing utility at his current consumption basket? If not, should he buy more hamburgers each week, or fewer?

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

Ray buys only hamburgers and bottles of root
beer out of a weekly income of
$100. He currently consumes 20 bottles of root
beer per week, and his marginal
utility of root beer is 6. The price of root beer is $2
per bottle. Currently, he also
consumes 15 hamburgers per week, and his
marginal utility of a hamburger is 8.
Is Ray maximizing utility at his current
consumption basket? If not, should he buy
more hamburgers each week, or fewer?

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