Suppose that a consumer with the utility function U X=5 and Y=10. If the prices of the two goods are Px = $1, and Py = $3. Calculate marginal utility per dollar spent on each good. Can this consumer increase utility without increasing expenditure and if so how? choses a bundle where

Economics: Private and Public Choice (MindTap Course List)
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ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
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4. Suppose that a consumer with the utility function U =X0.25 Y0.75 choses a bundle where
X=5 and Y=10. If the prices of the two goods are Px= $1, and Py = $3. Calculate
marginal utility per dollar spent on each good. Can this consumer increase utility without
increasing expenditure and if so how?
Transcribed Image Text:4. Suppose that a consumer with the utility function U =X0.25 Y0.75 choses a bundle where X=5 and Y=10. If the prices of the two goods are Px= $1, and Py = $3. Calculate marginal utility per dollar spent on each good. Can this consumer increase utility without increasing expenditure and if so how?
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