Assume that an individual consumes two goods, X and Y. The total utility of each good is independent of the rate of consumption of the other good. The price of X and Y are $40 and $60 respectively. Use the following table of total utilities to answer the following questions. Good Total Utility of X Total Utility of Y 1 20 45 2 38 78 3 54 108 4 68 135 5 80 159 6 90 180
a. The marginal utility of the fourth unit of Y is __________.
b. The marginal utility of the fifth unit of X is ___________.
c. The marginal utility per dollar spent on the third unit of X is __________.
d. The marginal utility per dollar spent on the second unit of Y is __________.
e. If the consumer has $420 to spend, ______ unit of X and _______ units of Y maximize utility subject to the budget constraint. Explain.
f. If the consumer has $220 to spend, _______ units of X and _______ units of Y maximize utility subject to the budget constraint. Explain.