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?
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?
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 9SQP
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Question
Given the following:
zA = 16 − 3x
zB = 14 − 2y,
where z is the
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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