Suppose that you are given $40,000 to split between two people, Jane and Fred. The income and marginal utility for each of them is shown in the following table. Amount to Jane Amount to Fred MU of Jane's Last Dollar Spent MU of Fred's Last Dollar Spent $ 5,000 $ 35,000 $ 100 $ 75 $ 8,000 $ 32,000 $ 80 $ 80 $ 11,000 $ 29,000 $ 60 $ 85 $ 14,000 $ 26,000 $ 40 $ 90 $ 17,000 $ 23,000 $ 20 $ 95 Instructions: Enter your answers as a whole number. If you want to maximize their combined utility, how much of the $40,000 should go to Jane? How much should go to Fred? Amount to Jane = S Amount to Fred = S

Suppose that you are given $40,000 to split between two people, Jane and Fred. The income and marginal utility for each of them is shown in the following table. Amount to Jane Amount to Fred MU of Jane's Last Dollar Spent MU of Fred's Last Dollar Spent $ 5,000 $ 35,000 $ 100 $ 75 $ 8,000 $ 32,000 $ 80 $ 80 $ 11,000 $ 29,000 $ 60 $ 85 $ 14,000 $ 26,000 $ 40 $ 90 $ 17,000 $ 23,000 $ 20 $ 95 Instructions: Enter your answers as a whole number. If you want to maximize their combined utility, how much of the $40,000 should go to Jane? How much should go to Fred? Amount to Jane = S Amount to Fred = S

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 9P

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