Use the following information to answer the next 3 questions. Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The price of X is $5, and the price of Y is $10. Units of the Good Total Utility of X Total Utility of Y 1 50 400 234 95 750 135 950 4 170 1100 5 200 1220 6 225 1320 7 245 1400 8 260 1450 Question A What is the marginal utility of the third unit of good Y? A. 20 B. 200 C. 316.7 D. 950 Question B If the consumer has $65 to spend on goods X and Y, what amount should be purchased of each in order to maximize utility? A. 1 unit of good X and 6 units of good Y B. 3 units of good X and 5 units of good Y C. 3 units of good X and 7 units of good Y D. 6 units of good X and 8 units of good Y Question C If the consumer has $110 to spend on goods X and Y, what optimal combination will the con- sumer choose? A. 6 units of good X and 8 units of good Y B. 7 units of good X and 8 units of good Y C. 8 units of good X and 7 units of good Y D. 8 units of good X and 8 units of good Y
Use the following information to answer the next 3 questions. Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The price of X is $5, and the price of Y is $10. Units of the Good Total Utility of X Total Utility of Y 1 50 400 234 95 750 135 950 4 170 1100 5 200 1220 6 225 1320 7 245 1400 8 260 1450 Question A What is the marginal utility of the third unit of good Y? A. 20 B. 200 C. 316.7 D. 950 Question B If the consumer has $65 to spend on goods X and Y, what amount should be purchased of each in order to maximize utility? A. 1 unit of good X and 6 units of good Y B. 3 units of good X and 5 units of good Y C. 3 units of good X and 7 units of good Y D. 6 units of good X and 8 units of good Y Question C If the consumer has $110 to spend on goods X and Y, what optimal combination will the con- sumer choose? A. 6 units of good X and 8 units of good Y B. 7 units of good X and 8 units of good Y C. 8 units of good X and 7 units of good Y D. 8 units of good X and 8 units of good Y
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
Related questions
Question
Transcribed Image Text:Use the following information to answer the next 3 questions.
Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable)
of each good is independent of the rate of consumption of other goods. The price of X is $5, and
the price of Y is $10.
Units of the Good
Total Utility of X
Total Utility of Y
1
50
400
234
95
750
135
950
4
170
1100
5
200
1220
6
225
1320
7
245
1400
8
260
1450
Question A
What is the marginal utility of the third unit of good Y?
A. 20
B. 200
C. 316.7
D. 950
Question B
If the consumer has $65 to spend on goods X and Y, what amount should be purchased of each in
order to maximize utility?
A. 1 unit of good X and 6 units of good Y
B. 3 units of good X and 5 units of good Y
C. 3 units of good X and 7 units of good Y
D. 6 units of good X and 8 units of good Y
Question C
If the consumer has $110 to spend on goods X and Y, what optimal combination will the con-
sumer choose?
A. 6 units of good X and 8 units of good Y
B. 7 units of good X and 8 units of good Y
C. 8 units of good X and 7 units of good Y
D. 8 units of good X and 8 units of good Y
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