please explain how to set up the question to approach it? I am a bit confused .... Suppose that Sam allocates his income between milk andcereal. Milk costs $2.50/gallon and cereal costs $5.00/box.Sam has $50/week to spend on these two goods. The tableshows Sam's preference for consumption bundles as wellMilkCerealMU milkMUcereal(gallons)(bоxes)------2161135as how Sam's marginal utility (MU) for milk and cereal,4152120respectively, varies as consumption varies.6.133105Given the information provided here, how should Sam8490allocate his income between milk and cereal?108575As this is his optimal consumption bundle, Samshould purchase1276.60147451658301849.12gallons of milk203108andboxes of cereal

The utility of consumer is maximized when Marginal Utility of Good X / Price Per unit of Good X =…

Suppose that Sam allocates his income between milk and cereal. Milk costs $2.50/gallon and cereal costs $5.00/box. Sam has $50/week to spend on these two goods. The table shows Sam's preference for consumption bundles as well Milk Cereal MU MU cereal milk (gallons) (boxes) --- --- 2 16 1 135 as how Sam's marginal utility (MU) for milk and cereal, 4 15 2 120 respectively, varies as consumption varies. 6. 13 3 105 Given the information provided here, how should Sam 8 9 4 90 allocate his income between milk and cereal? 10 8 75 As this is his optimal consumption bundle, Sam should purchase 12 7 60 14 7 45 16 5 8 30 18 4 12 gallons of milk 20 3 10 and boxes of cereal

Suppose that Sam allocates his income between milk and cereal. Milk costs $2.50/gallon and cereal costs $5.00/box. Sam has $50/week to spend on these two goods. The table shows Sam's preference for consumption bundles as well Milk Cereal MU MU cereal milk (gallons) (boxes) --- --- 2 16 1 135 as how Sam's marginal utility (MU) for milk and cereal, 4 15 2 120 respectively, varies as consumption varies. 6. 13 3 105 Given the information provided here, how should Sam 8 9 4 90 allocate his income between milk and cereal? 10 8 75 As this is his optimal consumption bundle, Sam should purchase 12 7 60 14 7 45 16 5 8 30 18 4 12 gallons of milk 20 3 10 and boxes of cereal

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

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please explain how to set up the question to approach it? I am a bit confused ....

Suppose that Sam allocates his income between milk and
cereal. Milk costs $2.50/gallon and cereal costs $5.00/box.
Sam has $50/week to spend on these two goods. The table
shows Sam's preference for consumption bundles as well
Milk
Cereal
MU milk
MUcereal
(gallons)
(bоxes)
---
---
2
16
1
135
as how Sam's marginal utility (MU) for milk and cereal,
4
15
2
120
respectively, varies as consumption varies.
6.
13
3
105
Given the information provided here, how should Sam
8
4
90
allocate his income between milk and cereal?
10
8
5
75
As this is his optimal consumption bundle, Sam
should purchase
12
7
6.
60
14
7
45
16
5
8
30
18
4
9.
12
gallons of milk
20
3
10
8
and
boxes of cereal

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