The table below shows the marginal benefit, in dollars, that Kareem derives from consuming two goods, Good X and cereal. Use this information to answer parts (1)-(G). Quantity Marginal Benefit Quantity Marginal Benefit of Good X of Good X of Cereal of Cereal S18 $32 S16 $28 3 S12 $24 $6 S20 $2 $16 so $12 Kareem has a limited weekly income of $18, and he spends it all on Good X and cereal. Assume the price of Good X is $2 per unit and the price of cereal is $4 per unit. (1) Given his weekly income, would Kareem be able to buy 3 units of Good X and 5 units of cereal? Explain using numbers. (g) Calculate the total consumer surplus from Good X if Kareem consumes 4 units of Good X. Show your work. (h) Identify the quantity of Good X and the quantity of cereal that will maximize Kareem's total benefit given his weekly income. Explain using marginal analysis.
The table below shows the marginal benefit, in dollars, that Kareem derives from consuming two goods, Good X and cereal. Use this information to answer parts (1)-(G). Quantity Marginal Benefit Quantity Marginal Benefit of Good X of Good X of Cereal of Cereal S18 $32 S16 $28 3 S12 $24 $6 S20 $2 $16 so $12 Kareem has a limited weekly income of $18, and he spends it all on Good X and cereal. Assume the price of Good X is $2 per unit and the price of cereal is $4 per unit. (1) Given his weekly income, would Kareem be able to buy 3 units of Good X and 5 units of cereal? Explain using numbers. (g) Calculate the total consumer surplus from Good X if Kareem consumes 4 units of Good X. Show your work. (h) Identify the quantity of Good X and the quantity of cereal that will maximize Kareem's total benefit given his weekly income. Explain using marginal analysis.
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 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...
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Suppose Kareem receives an additional $4. Should he purchase 1 additional unit of cereal or 2 additional units of Good X? Explain your answer.
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