For this problem, assume that Kendrick has $144 to spend on cigars and brandy each month and that both goods must be purchased whole (no fractional units). Cigars cost $6 each, and brandy costs $30 per bottle. Kendrick’s preferences for cigars and brandy are summarized by the following information: 

a. Fill in the figures for marginal utility and marginal utility per dollar for both cigars and brandy.

b. Are these preferences consistent with the law of diminishing marginal utility? Explain briefly.

c. Given the budget of $144, what quantity of cigars and what quantity of brandy will maximize Kendrick’s level of satisfaction? Explain briefly.

d. Now suppose the price of cigars rises to $8. Which of the columns in the table must be recalculated? Do the required recalculations.

e. After the price change, how many cigars and how many bottles of brandy will Kendrick purchase?

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No. per Month 1 2 3 4 5 6 7 Cigars TU MU 28 46 62 74 80 84 86 - I = - MUIS 1 1 T T I Bottles per Month 1 2 3 4 5 6 7 Brandy TU 150 270 360 420 450 470 480 MU - MU/S 1. T - T T T