What total utility will you realize

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Reference no: EM13885651

You are choosing between two goods, X and Y, and your marginal utility from each is as shown below.

Units of x MUx Units of Y MUy

1 23 1 18

2 16 2 16

3 12 3 14

4 8 4 10

5 4 5 8

6 2 6 4

a. If your income is $9.00 and the prices of X and Y are $2.00 and $1.00, respectively, what quantities of each will you purchase to maximize utility?

b. What total utility will you realize?

c. Assume that, other things remaining unchanged, the price of X falls to $1.00. What quantities of X and Y will you now purchase?

d. Using the two prices and quantities for X, derive a demand schedule (a table showing prices and quantities demanded) for X.

Reference no: EM13885651

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