Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6. Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint? Ramen perweek01234Total Utility(ramen)0140260360450MarginalUtility(ramen)14012010090SteakBurritosper week01234Total Utility(burritos)0160310410450MarginalUtility(burritos)16015010040

Tom's weekly budget is $44. The price of ramen is $6 per unit and the price of the burrito is $10…

Answered: Tom has a budget of $44 per week that…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Tom has a budget of $44 per week that he can spend on Ramen and/or steak burritos. Each burrito costs $10 and each bowl of Ramen is $6. Using the table below, what combination of these two goods will maximize Tom’s utility given his budget constraint?

Ramen per
week
0
1
2
3
4
Total Utility
(ramen)
0
140
260
360
450
Marginal
Utility
(ramen)
140
120
100
90
Steak
Burritos
per week
0
1
2
3
4
Total Utility
(burritos)
0
160
310
410
450
Marginal
Utility
(burritos)
160
150
100
40

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