The table below shows the marginal utility a customer would get by purchasing various quantities of A, B, and C. The product prices for A, B, and C is $3, $2, and $1 respectively. The consumer has $20 to spend on the three products.
Units of the product
Marginal utility of A
Marginal utility of B
Marginal utility of C
First
30
22
12
Second
27
20
10
Third
24
18
8
Fourth
21
16
6
Fifth
18
14
4
Sixth
15
12
2
Which combination will the consumer purchase?
(a)5 units of A, 6 units of B, and 4 units of C.
(b)2 units of A, 5 units of B, and 4 units of C.
(c)3 units of A, 4 units of B, and 3 units of C.
(d)4 units of A, 3 units of B, and 2 units of C.
The table below shows the marginal utility a customer would get by purchasing various quantities of A, B, and C. The product prices for A, B, and C is $3, $2, and $1 respectively. The consumer has $20 to spend on the three products.
| Units of the product | Marginal utility of A | Marginal utility of B | Marginal utility of C |
| First | 30 | 22 | 12 |
| Second | 27 | 20 | 10 |
| Third | 24 | 18 | 8 |
| Fourth | 21 | 16 | 6 |
| Fifth | 18 | 14 | 4 |
| Sixth | 15 | 12 | 2 |
Which combination will the consumer purchase?
(a)5 units of A, 6 units of B, and 4 units of C.
(b)2 units of A, 5 units of B, and 4 units of C.
(c)3 units of A, 4 units of B, and 3 units of C.
(d)4 units of A, 3 units of B, and 2 units of C.
Related textbook solutions
Related questions
Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the consumption rate of other goods.
The price of X and Y are respectively $40 and $60. Use the following table of total utilities to answer the following questions.
| Good | Total utility X | Total utility Y |
| 1 | 20 | 45 |
| 2 | 38 | 78 |
| 3 | 54 | 108 |
| 4 | 68 | 135 |
| 5 | 80 | 159 |
| 6 | 90 | 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 budget constraint. Explain.
g. If the consumer wanted 4 units of X and 6 units of Y, what would have to be his/her budget constraint in order to maximize his/her utility? Explain.
