Unit of product (1) Marginal utility, A (2) Marginal utility, B (3) Marginal utility, C First 18 39 12 Second 16 36 10 Third 14 33 9 Fourth 12 30 8 Fifth 10 27 7 Sixth 8 24 5 Seventh 6 21 3 If the prices of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility?
Unit of product (1) Marginal utility, A (2) Marginal utility, B (3) Marginal utility, C First 18 39 12 Second 16 36 10 Third 14 33 9 Fourth 12 30 8 Fifth 10 27 7 Sixth 8 24 5 Seventh 6 21 3 If the prices of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility?
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.12P
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Question
Columns 1 through 3 in the table below show the
Unit of product |
(1) Marginal utility, A |
(2) Marginal utility, B |
(3) Marginal utility, C |
First |
18 |
39 |
12 |
Second |
16 |
36 |
10 |
Third |
14 |
33 |
9 |
Fourth |
12 |
30 |
8 |
Fifth |
10 |
27 |
7 |
Sixth |
8 |
24 |
5 |
Seventh |
6 |
21 |
3 |
If the prices of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility?
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