The marginal utility of good A is 4 utils, and its price is $ 2. The marginal utility of good B is 6 utils, and its price is $1. Is the individual consumer maximizing (total) utility if she spends a total of $3 by buying one unit of each good? If not, how can more utility be obtained? Explain using the Equimarginal principle.

The marginal utility of good A is 4 utils, and its price is $ 2. The marginal utility of good B is 6 utils, and its price is $1. Is the individual consumer maximizing (total) utility if she spends a total of $3 by buying one unit of each good? If not, how can more utility be obtained? Explain using the Equimarginal principle.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

The marginal utility of good A is 4 utils, and its price is $
2. The marginal utility of good B is 6 utils, and its price
is $1. Is the individual consumer maximizing (total)
utility if she spends a total of $3 by buying one unit of
each good? If not, how can more utility be obtained?
Explain using the Equimarginal principle.

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