Question: Question 14 Points: 18 (a) Explain why point A is preferred over point B in the diagram below: Clothing Budget line A Indifference curve II

Question 14 Points: 18 (a) Explain why point A is preferred over point B in the diagram below: Clothing Budget line A Indifference curve II B Indifference curve I Food (5 marks) (b) You are choosing between two goods, X and Y, and your marginal utility from each is shown in the table below. Assume your income is $9 and the prices of X and Y are $2 and $1, respectively. Units of X MUx MUx / Px Units of Y MUy MUy / Py 10 5 8 8 N 2 6 6 4 2 5 3 5 4 6 1 6

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