The above table shows Jane’s total utility from buying dresses and from Shoes. Suppose that she has a monthly budget, each dress costs $200 and each pair of Shoes costs $100. a. Calculate Jane’s total utility and MU per dollar spent on Dresses. b. Calculate Jane’s total utility and MU per dollar spent on Shoes. c. If Jane has a budget of $1,000, how much of each good will Jane consume in equilibrium to maximize her total utility? d. What is the minimum monthly budget that Jane can maximize her total utility in consuming both goods?
The above table shows Jane’s total utility from buying dresses and from Shoes. Suppose that she has a monthly budget, each dress costs $200 and each pair of Shoes costs $100. a. Calculate Jane’s total utility and MU per dollar spent on Dresses. b. Calculate Jane’s total utility and MU per dollar spent on Shoes. c. If Jane has a budget of $1,000, how much of each good will Jane consume in equilibrium to maximize her total utility? d. What is the minimum monthly budget that Jane can maximize her total utility in consuming both goods?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
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The above table shows Jane’s total utility from buying dresses and from Shoes. Suppose that she has a monthly budget, each dress costs $200 and each pair of Shoes costs $100.
a. Calculate Jane’s total utility and MU per dollar spent on Dresses.
b. Calculate Jane’s total utility and MU per dollar spent on Shoes.
c. If Jane has a budget of $1,000, how much of each good will Jane consume in
equilibrium to maximize her total utility?
d. What is the minimum monthly budget that Jane can maximize her total
utility in consuming both goods?
Transcribed Image Text:Dresses
Shoes
Marginal
Utility
Marginal
Utility
Quantity
Quantity
1
800
1
300
2
400
2
200
3
200
3
150
4
100
4
75
5
50
5
50
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