2. Lauren likes the combination of Larry's Pizza and Dr. Pepper (soda) for dinner. When the price of a soda is $2 per unit and the price of a slice of pizza is $3, Lauren tries to maximize her satisfaction by consuming various units of soda and pizzas. The table below show you total utility of soda and pizza at different units. Table 1. Total Utility (TU) and Marginal Utility (MU) of Pizza and Soda Unit of Soda TU (Soda) MU (Soda) Unit of Pizza TU (Pizza) MU (Pizza) 1 100 1 300 180 540 720 840 3 240 3 4 280 4. 310 5 900 6. 330 6. 900 (1) Fill the two columns of marginal utility (MU) of soda and pizza. (2) When Lauren maximizes her satisfaction with 4 sodas ($2 each), how many pizzas she should purchase at $3 each slide? (3) If the price of pizza increases to $6 per slide, ceteris paribus, how may slides of pizzas should she purchase to maximize her total satisfaction?

2. Lauren likes the combination of Larry's Pizza and Dr. Pepper (soda) for dinner. When the price of a soda is $2 per unit and the price of a slice of pizza is $3, Lauren tries to maximize her satisfaction by consuming various units of soda and pizzas. The table below show you total utility of soda and pizza at different units. Table 1. Total Utility (TU) and Marginal Utility (MU) of Pizza and Soda Unit of Soda TU (Soda) MU (Soda) Unit of Pizza TU (Pizza) MU (Pizza) 1 100 1 300 180 540 720 840 3 240 3 4 280 4. 310 5 900 6. 330 6. 900 (1) Fill the two columns of marginal utility (MU) of soda and pizza. (2) When Lauren maximizes her satisfaction with 4 sodas ($2 each), how many pizzas she should purchase at $3 each slide? (3) If the price of pizza increases to $6 per slide, ceteris paribus, how may slides of pizzas should she purchase to maximize her total satisfaction?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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