Suppose that Allen has $1,000 to consume each month. He has only two options to choose...

 

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Suppose that Allen has $1,000 to consume each month. He has only two options to choose from: going out for a dinner and/or a café with his friends. Each time Allen chooses to go for a dinner he would spend $250. On the other hand, he would only spend $100 each time when going for a café. Part 1: According to his own marginal utility listed below, answer the following questions. 1- Complete the Marginal utility per dollar for each product 2- Draw the budget constraints graph. 3- How would Allen distribute his consumption to achieve maximum total utility possible? MU Of Dinner MU/P of MU of café MU/P Of Dinner café 1000 500 800 400 600 300 400 200 200 100 70 50 25 10 1234567 00 a9 Part 2: Now suppose that there has been a discount on dinner, and it would only cost Allen $200/dinner. 1- What would be the new marginal utility per dollar of dinner? 2- Draw a new line on the budget constraints the represents the current situation. 3- How would Allen distribute his consumption to achieve maximum total utility possible? Suppose that Allen has $1,000 to consume each month. He has only two options to choose from: going out for a dinner and/or a café with his friends. Each time Allen chooses to go for a dinner he would spend $250. On the other hand, he would only spend $100 each time when going for a café. Part 1: According to his own marginal utility listed below, answer the following questions. 1- Complete the Marginal utility per dollar for each product 2- Draw the budget constraints graph. 3- How would Allen distribute his consumption to achieve maximum total utility possible? MU Of Dinner MU/P of MU of café MU/P Of Dinner café 1000 500 800 400 600 300 400 200 200 100 70 50 25 10 1234567 00 a9 Part 2: Now suppose that there has been a discount on dinner, and it would only cost Allen $200/dinner. 1- What would be the new marginal utility per dollar of dinner? 2- Draw a new line on the budget constraints the represents the current situation. 3- How would Allen distribute his consumption to achieve maximum total utility possible?

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