b) Diana has $6.00 to spend. She has the option to buy two goods: sandwiches and peppermints. Sandwiches cost $3.00 each, and peppermints cost $1.00 per pack. The table below shows the utility Diana derives from consuming sandwiches or peppermints at various levels of consumption. i. In the table below, compute and complete the table below for the marginal utility per dollar for each level of consumption. Sandwiches Marginal utility / Marginal S (price per each) Utility 15 Peppermints Marginal Utility $ (price per each) Units Marginal Utility purchased 1 2 3 3 4 4 n/a 5 n/a 1 ii. Briefly explain how Diana should spend the first $3.00.

b) Diana has $6.00 to spend. She has the option to buy two goods: sandwiches and peppermints. Sandwiches cost $3.00 each, and peppermints cost $1.00 per pack. The table below shows the utility Diana derives from consuming sandwiches or peppermints at various levels of consumption. i. In the table below, compute and complete the table below for the marginal utility per dollar for each level of consumption. Sandwiches Marginal utility / Marginal S (price per each) Utility 15 Peppermints Marginal Utility $ (price per each) Units Marginal Utility purchased 1 2 3 3 4 4 n/a 5 n/a 1 ii. Briefly explain how Diana should spend the first $3.00.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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