PLEASE FIND SOLUTIONS TO WHERE QUESTION MARKS ARE INDICATED AND SOLVE THE FORMULA AT BOTTOM
Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $9.00, the price of good B is $3.00, the price of good C is $2.00 and the price of good D is $12.00. Ricardo's income is $53.00.
Column 1 Column 2 Column 3 Column 4 Column 5 Units of
Good A MU Units of
Good B MU Units of
Good C MU Units of
Good D MU Number of Dollars Saved MU 1 72 1 24 1 15 1 36 1 5.00 2 54 2 15 2 12 2 30 2 4.00 3 45 3 12 3 8 3 24 3 3.00 4 36 4 9 4 7 4 18 4 2.00 5 27 5 7 5 5 5 13 5 1.00 6 18 6 5 6 4 6 7 6 0.50 7 15 7 2 7 3.5 7 4 7 0.25 8 12 8 1 8 3 8 2 8 0.13
What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
Price of good A: $9.00, Units of A: ????
Price of good B: $3.00, Units of B: ?????
Price of good C: $2.00, Units of C: ????
Price of good D: $12.00, Units of D: ????
b. How many dollars will Ricardo choose to save? $?????
c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
( $ Ã ) + ( $ Ã ) + ( $ Ã ) + ( $ Ã ) + $ = $
PLEASE FIND SOLUTIONS TO WHERE QUESTION MARKS ARE INDICATED AND SOLVE THE FORMULA AT BOTTOM
Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $9.00, the price of good B is $3.00, the price of good C is $2.00 and the price of good D is $12.00. Ricardo's income is $53.00.
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | |||||
| Units of Good A | MU | Units of Good B | MU | Units of Good C | MU | Units of Good D | MU | Number of Dollars Saved | MU |
| 1 | 72 | 1 | 24 | 1 | 15 | 1 | 36 | 1 | 5.00 |
| 2 | 54 | 2 | 15 | 2 | 12 | 2 | 30 | 2 | 4.00 |
| 3 | 45 | 3 | 12 | 3 | 8 | 3 | 24 | 3 | 3.00 |
| 4 | 36 | 4 | 9 | 4 | 7 | 4 | 18 | 4 | 2.00 |
| 5 | 27 | 5 | 7 | 5 | 5 | 5 | 13 | 5 | 1.00 |
| 6 | 18 | 6 | 5 | 6 | 4 | 6 | 7 | 6 | 0.50 |
| 7 | 15 | 7 | 2 | 7 | 3.5 | 7 | 4 | 7 | 0.25 |
| 8 | 12 | 8 | 1 | 8 | 3 | 8 | 2 | 8 | 0.13 |
What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
Price of good A: $9.00, Units of A: ????
Price of good B: $3.00, Units of B: ?????
Price of good C: $2.00, Units of C: ????
Price of good D: $12.00, Units of D: ????
b. How many dollars will Ricardo choose to save? $?????
c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.
( $ Ã ) + ( $ Ã ) + ( $ Ã ) + ( $ Ã ) + $ = $
Related textbook solutions
Related questions
Greg has a weekly budget of $17.00 to spend on brownies and milk. The price of brownies is $2.00 and the price of milk is $3.00. Calculate marginal utility per dollar for each good and use it to complete the table below.
|
Brownies Per Period |
Marginal Utility Brownies |
MU/S Brownie |
Milk Per period |
Marginal Utility Milk |
MU/S Milk |
| 1 | 18 | 1 | 15 | ||
| 2 | 14 | 2 | 12 | ||
| 3 | 10 | 3 | 9 | ||
| 4 | 6 | 4 | 6 | ||
| 5 | 2 | 5 | 3 |
