For part b, is the utility received just the MU/P of 5 books and 1 pizza added up? 2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16each and pizzas cost $8 each.BooksMU/PPizzasMU/P13012526224.524.5202041617.5111085.572a.How many books and pizzas will Kent purchase if he has $88 to spend?b. How much utility will Kent receive from his purchases in a?C.The price of books rises to $20 a book. How do your answers to a andb change?8.8000000F4DIIDDF3F5F6F7F8F9F10#32$&34567860

Law of Equi -Marginal utility: It is the Law that states that ratio of the marginal utility to the…

2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 3 24.5 3 20 4 20 4 16 17.5 11 10 8 5.5 7 2 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? c. The price of books rises to $20 a book. How do your answers to a and b change?

2. The table below presents Kent's marginal utility per dollar for books and pizzas. Books cost $16 each and pizzas cost $8 each. Books MU/P Pizzas MU/P 1 30 1 25 26 24.5 3 24.5 3 20 4 20 4 16 17.5 11 10 8 5.5 7 2 a. How many books and pizzas will Kent purchase if he has $88 to spend? b. How much utility will Kent receive from his purchases in a? c. The price of books rises to $20 a book. How do your answers to a and b change?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 10RQ: What is the rule relating the ratio of marginal utility to prices of two goods at the optimal...

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Similar questions

Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
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Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.