You are choosing between two goods, X and Y, and your marginal utility from each is as shown below. Units of X MUX Units of Y MUy 10 2 8. 2 7 3. 6. 3. 6. 4 3. 4 3 Instructions: Enter your answers as whole numbers. a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, respectively, what quantities of each will you purchase to maximize utility? O units. Y =O units. b. What total utility will you realize? c. Assume that, other things remaining unchanged, the price of X falls to $2.00. What quantities of X and Y will you now purchase? O units. X =O units.
You are choosing between two goods, X and Y, and your marginal utility from each is as shown below. Units of X MUX Units of Y MUy 10 2 8. 2 7 3. 6. 3. 6. 4 3. 4 3 Instructions: Enter your answers as whole numbers. a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00, respectively, what quantities of each will you purchase to maximize utility? O units. Y =O units. b. What total utility will you realize? c. Assume that, other things remaining unchanged, the price of X falls to $2.00. What quantities of X and Y will you now purchase? O units. X =O units.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 3SQP
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Transcribed Image Text:You are choosing between two goods, X and Y, and your marginal utility from
each is as shown below.
Units of X
MUX
Units of Y
MUy
10
8.
2
2
7
3
4
4
4
4
6.
6
Instructions: Enter your answers as whole numbers.
a. If your income is $18.00 and the prices of X and Y are $4.00 and $2.00,
respectively, what quantities of each will you purchase to maximize utility?
X =
units.
Y =O units.
b. What total utility will you realize?
c. Assume that, other things remaining unchanged, the price of X falls to
$2.00. What quantities of X and Y will you now purchase?
units.
X =O units.
Y =
d. Using the two prices and quantities for X, derive a demand schedule (a table
showing prices and quantities demanded) for X.
Instructions: Start with the highest price first.
Quantity
Price
Demanded
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