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Assume that an individual consumes two goods, X and Y. The totalutility (assumed measurable) of each good is independent of therate of consumption of other good.
The price of X and Y are respectively $40 and $60. Use thefollowing table of total utilities to answer the followingquestions.

Good 1, 2 ,3 ,4, 5, 6
Total Utility of X 20, 38, 54, 68, 80, 90
Total Utility of Y 45, 78, 108, 135, 139, 180


a. The marginal utility of the fourth unit of Y is__________.
b. The marginal utility of the fifth unit of X is___________.
c. The marginal utility per dollar spent on the third unit of X is__________.
d. The marginal utility per dollar spent on the second unit of Y is__________.
e. If the consumer has $420 to spend, ______ unit of X and _______units of Y maximize utility subject to the budget constraint.Explain.
f. If the consumer has $220 to spend, _______ units of X and_______ units of Y maximize utility subject to the budgetconstraint. Explain.
g. If the consumer wanted 4 units of X and 6 units of Y what wouldhave to be his/her budget constraint in order to maximize his/herutility? Explain.

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manhokwe tawanda
manhokwe tawandaLv10
30 Sep 2019

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