Use the information in the table below to answer the following questions concerning a consumer’s choice between food and clothing. Clothing MUc MUc/Pc Food MUf MUf/Pf 1 60 6 1 115 5.75 2 55 2 105 3 51 3 98 4 48 4 94 5 47 5 92 6 46 6 90 Fill in the blanks that remain in the table. Let I = $130, Pf = $20, and Pc = $10. Does the market basket C = 1 and F = 6 staisfy the budget constraint? Could this be the utility maximizing market basket? If not, in which direction would the consumer like to reallocate his or her purchases (i.e. more food or more clothing)? Given I = $130, Pf = $20, and Pc = $10, and using the information in the table, what is the consumer’s utility maximizing market basket, subject to his budget constraint?
Use the information in the table below to answer the following questions concerning a consumer’s choice between food and clothing. Clothing MUc MUc/Pc Food MUf MUf/Pf 1 60 6 1 115 5.75 2 55 2 105 3 51 3 98 4 48 4 94 5 47 5 92 6 46 6 90 Fill in the blanks that remain in the table. Let I = $130, Pf = $20, and Pc = $10. Does the market basket C = 1 and F = 6 staisfy the budget constraint? Could this be the utility maximizing market basket? If not, in which direction would the consumer like to reallocate his or her purchases (i.e. more food or more clothing)? Given I = $130, Pf = $20, and Pc = $10, and using the information in the table, what is the consumer’s utility maximizing market basket, subject to his budget constraint?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Use the information in the table below to answer the following questions concerning a consumer’s choice between food and clothing.
|
Clothing |
MUc |
MUc/Pc |
Food |
MUf |
MUf/Pf |
|
1 |
60 |
6 |
1 |
115 |
5.75 |
|
2 |
55 |
|
2 |
105 |
|
|
3 |
51 |
|
3 |
98 |
|
|
4 |
48 |
|
4 |
94 |
|
|
5 |
47 |
|
5 |
92 |
|
|
6 |
46 |
|
6 |
90 |
|
- Fill in the blanks that remain in the table.
- Let I = $130, Pf = $20, and Pc = $10. Does the market basket C = 1 and F = 6 staisfy the budget constraint? Could this be the utility maximizing market basket? If not, in which direction would the consumer like to reallocate his or her purchases (i.e. more food or more clothing)?
- Given I = $130, Pf = $20, and Pc = $10, and using the information in the table, what is the consumer’s utility maximizing market basket, subject to his budget constraint?
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