Quantity X (unit) Quantity Y (unit) Ux (util) Uy (util) 1 1 15 12 2 2 26 21 3 35 27 4 4 41 32 5 5 45 35 6 6 48 37 Table 1.1 Assume the price of Good X is RM2 per unit and the price of Good Y is RM1 per unit. With RM13 of income, the household intends to spend all the income on both goods. a. Compute the marginal utility for each quantity in Table 1.1. b. Solve the utility maximizing problem by identifying the number of Good X and Good Y that the household should purchase (based on marginal utility per price).
Quantity X (unit) Quantity Y (unit) Ux (util) Uy (util) 1 1 15 12 2 2 26 21 3 35 27 4 4 41 32 5 5 45 35 6 6 48 37 Table 1.1 Assume the price of Good X is RM2 per unit and the price of Good Y is RM1 per unit. With RM13 of income, the household intends to spend all the income on both goods. a. Compute the marginal utility for each quantity in Table 1.1. b. Solve the utility maximizing problem by identifying the number of Good X and Good Y that the household should purchase (based on marginal utility per price).
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics
Section: Chapter Questions
Problem 3WNG
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Transcribed Image Text:Quantity X (unit)
Quantity Y (unit)
Ux (util)
Uy (util)
1
1
15
12
2
2
26
21
3
3
35
27
4
4
41
32
5
5
45
35
48
37
Table 1.1
Assume the price of Good X is RM2 per unit and the price of Good Y is RM1 per unit. With
RM13 of income, the household intends to spend all the income on both goods.
a. Compute the marginal utility for each quantity in Table 1.1.
b. Solve the utility maximizing problem by identifying the number of Good X and Good Y that
the household should purchase (based on marginal utility per price).
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