a. The values for Columns 2, 3, 6, and 7 come from Problem 1 (see above). Use the following information and the other data to complete columns 4 and 8: the price of a cheeseburger is $2, the price of a bag of French fries is $1.

b. If you have $11 to spend (and you spend all of it), what is the utility-maximizing combination of cheeseburgers and French fries? 

 

Transcribed Image Text:

(1) (2) (3) (4) (5) (6) (7) (8) MU per MU per Marginal Utility of Cheese- Total Total Marginal Utility of Utility of Bags of (MU/Pd) French Number of Utility of Dollar Dollar Cheese- Cheese- French French (MU/Pd) burgers burger burgers Price =$2 Fries Fries Fries Price=$1 1 14 14 7 1 15 15 15 2 24 10 5 2 23 8 8 3 32 8. 4 3 29 6 6 4 38 6 3 4 35 6 8. 5 42 4 2 5 39 4 4 6 44 2 1 6 39 (1) (2) (3) (4) (5) (6) (7) (8) MU per MU per Marginal Utility of Cheese- Total Total Marginal Utility of Utility of Bags of (MU/Pd) French Number of Utility of Dollar Dollar Cheese- Cheese- French French (MU/Pd) burgers burger burgers Price =$2 Fries Fries Fries Price=$1 1 14 14 7 1 15 15 15 2 24 10 5 2 23 8 8 3 32 8. 4 3 29 6 6 4 38 6 3 4 35 6 8. 5 42 4 2 5 39 4 4 6 44 2 1 6 39

Answer rating: 100% (QA)

a on the basis of given information the following schedule is prepared Number of cheese Utillty of ... View the full answer