The consumer's problem of allocating her budget optimally between buyingsweaters and jeans. Below is the table showing
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Question:
- The consumer's problem of allocating her budget optimally between buyingsweaters and jeans. Below is the table showing the total benefit to the consumer as a function of the number of units she may purchase.
- Fill out the Marginal Benefit columns for both sweaters and Jeans. Make sure you know how to produce these measures.
- Calculate for each good, the marginal benefit per dollar spent if prices are $25 for a sweater and $100 for jeans. Show, and explain in detail (like we did in class) the optimal consumption bundle for the consumer assuming the budget remain at $300.
Sweaters | Jeans | |||||
Units | Total Benefit | Marginal Benefit (MB) | MB per $ Spent | Total Benefit | Marginal Benefit (MB) | MB per $ Spent |
0 | 0 | 0 | ||||
1 | 100 | 160 | ||||
2 | 185 | 310 | ||||
3 | 260 | 410 | ||||
4 | 325 | 490 | ||||
5 | 385 | 520 | ||||
6 | 435 | 530 | ||||
7 | 480 | 533 | ||||
8 | 520 | 535 | ||||
9 | 555 | 536 | ||||
10 | 589 | 537 | ||||
11 | 622 | 538 | ||||
12 | 654.5 | 539 |
Related Book For
Financial Management for Public Health and Not for Profit Organizations
ISBN: 978-0132805667
4th edition
Authors: Steven A. Finkler, Thad Calabrese
Posted Date: