What combination of candy bars and potato chips

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Reference no: EM133066179

The table below shows Liz's total utility (TU) from candy bars and potato chips. Her budget is $4 per day. The price of a candy bar is $1.00 and the price of a bag of chips is 
$1.00. 

              Candy Bars                                                        Potato Chips

Q           TU            MU          MU/P               Q          TU          MU             MU/P

0               0                                                      4            22

1                10                                                     3           19

2                19                                                     2            15

3                27                                                    1               8

4               29                                                     0               0 

a. Fill in the last two columns in each table. (Remember that the formula for marginal utility (MU) is: ΔTU/ΔQ.)

b. What combination of candy bars and potato chips should she consume in order to maximize her total utility? Carefully explain.

Reference no: EM133066179

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