What is your optimal combination of coffee and cream puff

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Reference no: EM131071007

Question

The below table gives the total utility Jamal derives from the consumption of coffee and cream puffs. Jamal has $12 to spend on these two confectionery goods. The price of a coffee is $3 and the price of a cream puff is $1.50

a) Complete the table

Coffee Cream puffs

Quantity	TU	MU	(MU/P)	Quantity	TU	MU	(MU/P)
0	0			0	0
1	126			1	54.0
2	243			2	103.5
3	342			3	145.5
4	414			4	177.0
5	441			5	196.5

b) Does this follow the Law of diminishing marginal utility? Explain why?

c) what is your optimal combination of coffee and cream puff?

Reference no: EM131071007

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