6. Suppose that the price of good X is $1 and the price of good Y is $1, and that income is $7. The following tables show the marginal utility schedules for X and Y:

Good X:                                  Good Y:

Q_x        MU_x                            Q_y        MU_y

1          15                                1          12

2          11                                2          9

3          9                                  3          6

4          6                                  4          5

5          4                                  5          3

6          3                                  6          2

7          1                                  7          1

How much of good X and how much of good Y should the individual purchase to maximize utility? Explain how you know. (Hint: There are 2 conditions that must be satisfied.)

Answer rating: 100% (QA)

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