a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, 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 $2.00. 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 Price of X Quantity Demanded of X $ $
a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, 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 $2.00. 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 Price of X Quantity Demanded of X $ $
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
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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
23
18
16
2
16
3.
12
3
14
4
8
4
10
5
4
8
2
4
Instructions: Enter your answers as a whole number.
a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, 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 $2.00. 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
Price of X
Quantity Demanded of X
$4
2$
Transcribed Image Text:The following table shows the amounts of additional satisfaction (marginal utility) that Ross would get from consuming successive
quantities of products A and B.
a. Fill in the MU/P column for each product.
Instructions: Enter your answers rounded to one decimal place.
Price of Good A = $8
Price of Good B = $4
Units of
MU of Good A,
Units of
Good B
MU of Good B,
MU/P for A
MU/P for B
Good A
utils
utils
1
56
1
32
2
48
28
32
3
24
4
24
4
20
20
5
12
16
6.
10
7
12
7
8
If Ross has an income of $64, how many units of each good will he purchase to maximize his utility?
Instructions: Enter your answers as a whole number.
units of good A
units of good B
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