Assume that an individual consumes two goods, X and Y. The total utility of each good is independent of the rate of consumption of the other good.The price of X and Y are $40 and $60 respectively. Use the following table of total utilities to answer the following questions.
Good
Total Utility of X
Total Utility of 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.
Assume that an individual consumes two goods, X and Y. The total utility of each good is independent of the rate of consumption of the other good.The price of X and Y are $40 and $60 respectively. Use the following table of total utilities to answer the following questions.
Good | Total Utility of X | Total Utility of 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.