Question: Dennis Toffice purchases only candy and toothpaste. The price of candy is $1 per bag and the price of toothpaste is $3 per tube.
Dennis Toffice purchases only candy and toothpaste. The price of candy is $1 per bag and the price of toothpaste is $3 per tube. The table below details Dennis' marginal utility from candy and toothpaste. Bags of Candy 0 1 2 3 5 6 7 8 Marginal Utility of Candy 17 15 13 11 9 7 5 3 MU/P for Candy Toothpaste Tubes 0 1 2 3 4 5 6 7 8 Marginal Utility of Toothpaste 30 27 24 21 18 15 12 9 MU/P for Toothpaste As a utility-maximizing consumer, if Dennis has a disposable income of $11, he should purchase total utility. to maximize his
Step by Step Solution
There are 3 Steps involved in it
To determine how Dennis should allocate his budget between candy and toothpaste we need to calc... View full answer
Get step-by-step solutions from verified subject matter experts
