Suppose that you are given $20,000 to split between two people, Jane and Fred. The income and marginal utility for each of them is shown in the following table. Amount to Jane Amount to Fred MU of Jane's Last Dollar Spent MU of Fred's Last Dollar Spent $ 5,000 $ 15,000 80 65 $ 7,000 $ 13,000 70 70 $ 9,000 $ 11,000 60 75 $ 11,000 $ 9,000 50 80 $ 13,000 $ 7,000 40 85 Instructions: Enter your answers as a whole number. If you want to maximize their combined utility, how much of the $20,000 should go to Jane? How much should go to Fred? Amount to Jane = $ Amount to Fred = $
Suppose that you are given $20,000 to split between two people, Jane and Fred. The income and marginal utility for each of them is shown in the following table. Amount to Jane Amount to Fred MU of Jane's Last Dollar Spent MU of Fred's Last Dollar Spent $ 5,000 $ 15,000 80 65 $ 7,000 $ 13,000 70 70 $ 9,000 $ 11,000 60 75 $ 11,000 $ 9,000 50 80 $ 13,000 $ 7,000 40 85 Instructions: Enter your answers as a whole number. If you want to maximize their combined utility, how much of the $20,000 should go to Jane? How much should go to Fred? Amount to Jane = $ Amount to Fred = $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that you are given $20,000 to split between two people, Jane and Fred. The income and
| Amount to Jane | Amount to Fred | MU of Jane's Last Dollar Spent | MU of Fred's Last Dollar Spent |
|---|---|---|---|
| $ 5,000 | $ 15,000 | 80 | 65 |
| $ 7,000 | $ 13,000 | 70 | 70 |
| $ 9,000 | $ 11,000 | 60 | 75 |
| $ 11,000 | $ 9,000 | 50 | 80 |
| $ 13,000 | $ 7,000 | 40 | 85 |
Instructions: Enter your answers as a whole number.
If you want to maximize their combined utility, how much of the $20,000 should go to Jane? How much should go to Fred?
Amount to Jane = $
Amount to Fred = $
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