The tables show the utility Parker experienced from consuming varying quantities of waffles and pancakes. Assume that waffles cost $2.00 each, pancakes cost $1.00 each, and that Parker has $8.00 to spend on these two goods. Since Parker cannot afford more than four waffles or eight pancakes, the utility is given only for quantities smaller than these.Quantity of wafflesTotal utility of wafflesMarginal utility of waffles1100100218080324060427030Quantity of pancakesTotal utility of pancakesMarginal utility of pancakes140402703039020410515511510612057123381252Given his budget constraint, determine what quantities of waffles and pancakes Parker will consume to maximize utility.quantity of waffles: waffleswafflesquantity of pancakes: pancakes

Parker utility maximization will take place at the point when marginal utility per dollar of waffles…

Answered: The tables show the utility Parker…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The tables show the utility Parker experienced from consuming varying quantities of waffles and pancakes. Assume that waffles cost $2.00 each, pancakes cost $1.00 each, and that Parker has $8.00 to spend on these two goods. Since Parker cannot afford more than four waffles or eight pancakes, the utility is given only for quantities smaller than these.

Quantity of waffles	Total utility of waffles	Marginal utility of waffles
1	100	100
2	180	80
3	240	60
4	270	30

Quantity of pancakes	Total utility of pancakes	Marginal utility of pancakes
1	40	40
2	70	30
3	90	20
4	105	15
5	115	10
6	120	5
7	123	3
8	125	2

Given his budget constraint, determine what quantities of waffles and pancakes Parker will consume to maximize utility.

quantity of waffles:

waffleswaffles

quantity of pancakes:

pancakes

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