nuts, coffee, or both. HOW UIg he would spend a dollar buying a first cup of coffee? LO7.2 4. 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, $18, $6, $4, and $24 and that Ricardo has an income of $106. LO7.2 a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
nuts, coffee, or both. HOW UIg he would spend a dollar buying a first cup of coffee? LO7.2 4. 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, $18, $6, $4, and $24 and that Ricardo has an income of $106. LO7.2 a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? b. How many dollars will Ricardo choose to save? c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Caci, un
he would spend a dollar buying a first cup of coffee? LO7.2
4. 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, $18, $6, $4, and $24
and that Ricardo has an income of $106. LO7.2
a. What quantities of A, B, C, and D will Ricardo purchase in
maximizing his utility?
b. How many dollars will Ricardo choose to save?
c. Check your answers by substituting them into the algebraic
statement of the utility-maximizing rule.
nuts, coffee, or both. How big would that buuget nave LU DC DCIUIU
Transcribed Image Text:KIGVCHAPTER 7 Utility M=
COLRUGCE
Column 1
Column 2
Column 3
Column 4
Column 5
Units
Units
Units
Number of
Units
of A
MU
of B
MU
of C
MU
of D
MU
Dollars Saved
MU
1
72
1
24
1
15
1
36
1
54
15
12
30
2
4
3
45
12
8
24
3
4 W 7
Iso 5
36
4
18
4
2
27
7
13
1
6.
18
6.
4
1
15
2
7
ei 3
8.
2
8
8.
12
08
8.
6. ADVANCED ANALYSIS Let MU, = z =
7 is marginal utility
your mar-
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