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Refer to table 1.1 when answering questions 13 and 14. Good X ($2 each) Quantity Total Utility Good Y ($1 each) Quantity "Total Utility 14 VON 14. If income remains at $13 and the price of X falls to $1.00, what combination of X and Y will the consumer buy to maximize satisfaction? a. 7 units of X and 7 units of Y. b. 7 units of X and 6 units of Y. c. 6 units of X and 7 units of Y. d. 8 units of X and 5 units of Y.
Refer to table 1.1 when answering questions 13 and 14. Good X ($2 each) Quantity Total Utility Good Y ($1 each) Quantity "Total Utility 14 VON 14. If income remains at $13 and the price of X falls to $1.00, what combination of X and Y will the consumer buy to maximize satisfaction? a. 7 units of X and 7 units of Y. b. 7 units of X and 6 units of Y. c. 6 units of X and 7 units of Y. d. 8 units of X and 5 units of Y.
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Related questions
A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility that their consumption will yield is shown in the table below. Assume that the prices of X, Y, and Z are $10, $2, and $8, respectively, and that the consumer has an income of $74 to spend.
(a) Complete the following table by computing the marginal utility per dollar for successive units of X, Y, and Z to one or two decimal places.
(b) How many units of X, Y, and Z will the consumer buy when maximizing utility and spending all income? Show this result using the utility maximization formula.
(c) Why would the consumer not be maximizing utility by purchasing 2 units of X, 4 units of Y, and 1 unit of Z?
| Product X | Product Y | Product Z | ||||||||
|
Quantity |
Utility |
Marginal Utility per $ |
Quantity |
Utility |
Marginal Utility per $ |
Quantity |
Utility |
Marginal Utility per $ |
||
| 1 | 42 | _____ | 1 | 14 | _____ | 1 | 32 | _____ | ||
| 2 | 82 | _____ | 2 | 26 | _____ | 2 | 60 | _____ | ||
| 3 | 118 | Ā | 3 | 36 | _____ | 3 | 84 | _____ | ||
| 4 | 148 | _____ | 4 | 44 | _____ | 4 | 100 | _____ | ||
| 5 | 170 | _____ | 5 | 50 | _____ | 5 | 110 | _____ | ||
| 6 | 182 | _____ | 6 | 54 | _____ | 6 | 116 | _____ | ||
| 7 | 182 | _____ | 7 | 56.4 | _____ | 7 | 120 | _____ |
||
