4. Mork likes both smoothies and energy bars. The table below shows the utility that Mork...
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4. Mork likes both smoothies and energy bars. The table below shows the utility that Mork gets from these two items: Smoothies Total utility from smoothies (utils) Energy bars Total utility from energy bars (utils) 0 0 20 0 1 2 3 4 5 6 25 45 60 70 75 75 0 1 2 3 4 5 6 38 54 68 80 90 The price of a smoothie is $2, the price of an energy bar is $1. Mork has $10 to spend. a. Compute the marginal utility of each additional energy bar and smoothie, and graph each MU curve. b. If Mork spends the entire $10, which consumption bundles will use up the entire $10? Graph Mork's budget line. c. Mork likes to maximize utility. What is the optimal consumption bundle for Mork, given the budget constraint? Explain why this is the best choice, using marginal utility analysis; using a graph for this part is optional. 4. Mork likes both smoothies and energy bars. The table below shows the utility that Mork gets from these two items: Smoothies Total utility from smoothies (utils) Energy bars Total utility from energy bars (utils) 0 0 20 0 1 2 3 4 5 6 25 45 60 70 75 75 0 1 2 3 4 5 6 38 54 68 80 90 The price of a smoothie is $2, the price of an energy bar is $1. Mork has $10 to spend. a. Compute the marginal utility of each additional energy bar and smoothie, and graph each MU curve. b. If Mork spends the entire $10, which consumption bundles will use up the entire $10? Graph Mork's budget line. c. Mork likes to maximize utility. What is the optimal consumption bundle for Mork, given the budget constraint? Explain why this is the best choice, using marginal utility analysis; using a graph for this part is optional.
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Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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