You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table. Units of X MUX Units of Y MUY 1 10 1 8 2 8 2 7 3 6 3 6 4 4 4 5 5 3 5 6 2 6 4 3 Instructions: Enter your answers as a whole number. a. If your income is $18 and the prices of X and Y are $4 and $2, respectively, what quantities of each will you purchase to maximize utility? units of X and units of Y b. What total utility will you realize? utils c. Assume that, other things remaining unchanged, the price of X falls to $2. What quantities of X and Y will you now purchase? units of X and units of Y
You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table. Units of X MUX Units of Y MUY 1 10 1 8 2 8 2 7 3 6 3 6 4 4 4 5 5 3 5 6 2 6 4 3 Instructions: Enter your answers as a whole number. a. If your income is $18 and the prices of X and Y are $4 and $2, respectively, what quantities of each will you purchase to maximize utility? units of X and units of Y b. What total utility will you realize? utils c. Assume that, other things remaining unchanged, the price of X falls to $2. What quantities of X and Y will you now purchase? units of X and units of Y
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:You are choosing between two goods, X and Y, and your marginal utility from each is shown in the following table.
Units of X
MUX
Units of Y
MUY
1
10
1
8
2
8
2
7
3
6
3
6
4
4
4
5
5
3
6
2
5
6
4
3
Instructions: Enter your answers as a whole number.
a. If your income is $18 and the prices of X and Y are $4 and $2, respectively, what quantities of each will you purchase to
maximize utility?
| units of X and
units of Y
b. What total utility will you realize?
utils
c. Assume that, other things remaining unchanged, the price of X falls to $2. What quantities of X and Y will you now purchase?
| units of X and
units of Y
d. Using the two prices and quantities for X, complete the table to derive the derived demand schedule (a table showing prices and
quantities demanded) for X.
Instructions: Start with the highest price first.
Quantity
Price of X Demanded of X
$
$
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