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29 Jan 2022
- Suppose a particular consumer has 8 birr to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from consumption of the goods is given below.
Quantity
MUx
MUy
1
36
30
2
24
22
3
20
16
4
18
12
5
16
10
6
10
4
- Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
- What is the total utility at the utility maximization level?
- Suppose a particular consumer has 8 birr to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from consumption of the goods is given below.
Quantity
MUx
MUy
1
36
30
2
24
22
3
20
16
4
18
12
5
16
10
6
10
4
- Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
- What is the total utility at the utility maximization level?