What is the marginal utility of the fourth unit of y

Reference no: EM13233953

Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other good.
The price of X and Y are respectively $40 and $60. Use the following table of total utilities to answer the following questions.

Good 1, 2 ,3 ,4, 5, 6
Total Utility of X 20, 38, 54, 68, 80, 90
Total Utility of Y 45, 78, 108, 135, 139, 180

a. The marginal utility of the fourth unit of Y is __________.

b. The marginal utility of the fifth unit of X is ___________.

c. The marginal utility per dollar spent on the third unit of X is __________.

d. The marginal utility per dollar spent on the second unit of Y is __________.

e. If the consumer has $420 to spend, ______ unit of X and _______ units of Y maximize utility subject to the budget constraint. Explain.

f. If the consumer has $220 to spend, _______ units of X and _______ units of Y maximize utility subject to the budget constraint. Explain.

g. If the consumer wanted 4 units of X and 6 units of Y what would have to be his/her budget constraint in order to maximize his/her utility? Explain.

Reference no: EM13233953

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