Given the following:   zA = 16 − 3x         zB = 14 − 2y,  where z is the marginal utility per dollar measured in utils (zA = MUA/PA, zB = MUB/PB), x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $9 to spend on A and B—that is, x + y = $9.     Instructions: Enter your answers as whole numbers.   a. How is the $9 best allocated between A and B? On A: On B:     b. How much utility will the marginal dollar yield?

Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 9SQP
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Given the following:  

zA = 16 − 3x        

zB = 14 − 2y

where z is the marginal utility per dollar measured in utils (zA = MUA/PA, zB = MUB/PB), x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $9 to spend on A and B—that is, x + y = $9.  

 

Instructions: Enter your answers as whole numbers.

 

a. How is the $9 best allocated between A and B?

On A:

On B:

 

 

b. How much utility will the marginal dollar yield?

 

 

 

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