Table 1 shows Cassandra's utility from the consumption of Popcorn (P.) and Candy bars (Ce) during a week. Total Marginal utility Utility from from Рорсom Рopсom TUPC MUPC Marginal utility from Candybars Candybars Pcs MUCB Total MUPC utility from MUCE Quantity PPC TUCB 1 20 13 36 26 50 36 4 62 44 72 51 б 80 57 Ppc = P10 Pce = P5.00 1. Fill out the empty columns applying an appropriate formula. 2. Cassandra's weekly allowance is P40. Answer the following if she spends her entire income, a. How much popcorn and how many candy bars will Cassandra consume each week if she maximizes her utility? candy bars b. Show that the 2 utility maximizing conditions (equi-marginal principle and the income constraint) are satisfied. MUCB рорcom; b.1. MUPC PPc Pcs b.2. I= PPc Qpc + Pca Qcs c. If Cassandra consumes 3 bags of popcorn and 2 candy bars, compute and explain why with this combination, she is not maximizing utility.
Table 1 shows Cassandra's utility from the consumption of Popcorn (P.) and Candy bars (Ce) during a week. Total Marginal utility Utility from from Рорсom Рopсom TUPC MUPC Marginal utility from Candybars Candybars Pcs MUCB Total MUPC utility from MUCE Quantity PPC TUCB 1 20 13 36 26 50 36 4 62 44 72 51 б 80 57 Ppc = P10 Pce = P5.00 1. Fill out the empty columns applying an appropriate formula. 2. Cassandra's weekly allowance is P40. Answer the following if she spends her entire income, a. How much popcorn and how many candy bars will Cassandra consume each week if she maximizes her utility? candy bars b. Show that the 2 utility maximizing conditions (equi-marginal principle and the income constraint) are satisfied. MUCB рорcom; b.1. MUPC PPc Pcs b.2. I= PPc Qpc + Pca Qcs c. If Cassandra consumes 3 bags of popcorn and 2 candy bars, compute and explain why with this combination, she is not maximizing utility.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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