Refer to Figure 6.15. Why is Jason not maximizing his utility at point C? He is not spending his entire budget. His marginal utility per dollar spent on the last sandwich is greater than his marginal utility per dollar spent on his last hot dog. His marginal utility per dollar spent on the last sandwich is less than his marginal utility per dollar spent on his last hot dog. He is maximizing his utility at point C.

Refer to Figure 6.15. Why is Jason not maximizing his utility at point C? He is not spending his entire budget. His marginal utility per dollar spent on the last sandwich is greater than his marginal utility per dollar spent on his last hot dog. His marginal utility per dollar spent on the last sandwich is less than his marginal utility per dollar spent on his last hot dog. He is maximizing his utility at point C.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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am. 113.
Every month, a family of three spends $2,000 on food (F) and other items (O). The family’s preferences are represented by the utility function U(F,O) = F1/5O4/5. The unit price of food and the unit price of other items are both $1. Find this family’s monthly food expenditure.The family could join a consumers’ club. At the club, food costs 20% less than in other stores (i.e., at the food club PF = $0.8)
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Please answer carefully and explain in as much detail as possible.
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Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some money…