A child is given $8.80 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table: Number of MU of MU of Hard Items Chocolates Candies 60 150 2 50 140 3 40 120 4 30 100 20 80 6 10 70 7 5 50 8 20 Refer to the above table. Which combination would give the child the maximum utility out of spending $8.00? 4 chocolates and 6 hard candies 6 chocolates and 8 hard candies 2 chocolates and 4 hard candies
A child is given $8.80 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table: Number of MU of MU of Hard Items Chocolates Candies 60 150 2 50 140 3 40 120 4 30 100 20 80 6 10 70 7 5 50 8 20 Refer to the above table. Which combination would give the child the maximum utility out of spending $8.00? 4 chocolates and 6 hard candies 6 chocolates and 8 hard candies 2 chocolates and 4 hard candies
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...
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