Question: fiil out the blank and and do the graph s for me 4. Deriving demand from a marginal utility table with two goods Hilary has
fiil out the blank and and do the graph s for me
4. Deriving demand from a marginal utility table with two goods Hilary has a $25 cosmetics budget that she uses to buy nail polish and lipstick. Assume the price of nail polish (P) Is fixed at $5. Table A shows Hillary's marginal utility (MU) and marginal utility per dollar () she receives from the first through fifth bottles of nall polish she buys each month. Table B shows the same Information for lipstick when the price of a tube of lipstick (PL) Is either $10 or $5. Assume that Hilary Is a rational consumer who wants to maximize her utility. Table A Nail Polish MU MU/P (Bottles) (Utis) (IF P=$5) 75 15 50 12 W N 50 10 35 w w un 15 Table B Lipstick MU MU/P (Tubes) (Utis) (Ir P=$10) (IF P=$5) 100 OT 20 16 60 40 un 10 If the price of a tube of lipstick Is $10, the price of a bottle of nail polish Is $5, and Hilary spends her entire budget of $25, she will choose to buy of nall polish and of lipstick. Now, suppose that lipstick goes on sale, and Its price decreases to $5. Hilary's utility Is now maximized if she buys of nall polish and of lipstick. Suppose the price of nail polish is fixed at $5, and Hillary's budget Is fixed at $25. On the graph, use the blue line (circle symbols) to plot Hilary's demand for Mpstick. Do this by placing one blue point ( circle symbol) on Hilary's demand for lipstick when the price is $10 and the second blue point on Hilary's demand for lipstick when the price is $5. (?) 15 Hilary's Demand 10 PRICE (Dollars per tube) QUANTITY (Tubes of lipstick)Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
