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Question 13 of 16
20 Suppose that Sam allocates his income between milk and
cereal. Milk costs $2.50gallon and cereal costs $5.00? box. Sam has $50? week to spend on these two goods. The table shows Sam's preference for consumption bundles as well as how Sam's marginal utility (?MU) for milk and cereal, respectively, varies as consumption varies.
Given the information provided here, how should Sam allocate his income between milk and cereal?
As this is his optimal consumption bundle, Sam should purchase
\table[[Milk (gallons),()milk,Cereal (boxes),()cereal
4 : 2 7 PM Tue Nov 1 2

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