Which consumer is not maximizing his or her utility

Reference no: EM13202441

Jim and Matt allocate their consumption between two goods: hats and bats. The price of hats is $4 each and the price of bats is $8 each. For Jim, the marginal utility of the last hat consumed was 8 and the marginal utility of the last bat was 24. For Matt the marginal utility of the last hat was 6 and the marginal utility of the last bat was 12. Which consumer is not maximizing his/her utility? How can you tell? How should he/she
change their allocation?

Reference no: EM13202441

Questions Cloud

Calculate a detailed company cash budget : Calculate a detailed company cash budget for the forthcoming year. Summarize the sources and uses of cash, and identify the external financing needs for the forthcoming two year

Wjhat would affect the equilibrium real wage : Explain how each of the following would affect the equilibrium real wage, and equilibrium level of employment. a. A relaxation of immigration laws which leads to a large increase in the number of immigrants entering the country.

Why private sector customer demand reduces sales : Computer Products Corp. sells peripheral equipment used by both private businesses and the government. Due to a recession, Computer Product's sales have declined by 100,000 units and it now has 200,000 units of excess capacity.

What are the operating cash flows at the end : What are the operating cash flows at the end of Year 2 and calculate the capital structure weights which would be used to calculate the weighted average cost of capital and what are the operating cash flows at the end of Year 2

Which consumer is not maximizing his or her utility : Jim and Matt allocate their consumption between two goods: hats and bats. The price of hats is $4 each and the price of bats is $8 each. For Jim, the marginal utility of the last hat consumed was 8 and the marginal utility of the last bat was 24.

Find an equation for the distance the pendulum : Three seconds later the pendulum hangs farthest away from the wall (83 cm). Find an equation for the distance the pendulum is from the wall at any time t.

Which of the following situations is inconsistent : Which of the following situations is inconsistent?

Why industry is confronted with government regulations : Assume that the The World Steel industry wants to expand and that its only option is a merger. Now the industry is confronted with government regulations to oversee the merger. Analyze how the different forces will come together to create a converg..

What is the irr on project : The project net working capital is equal to 10% of the next year's revenue. The tax-rate is 35%. What are the project's net cash flows for years 0-3? What is the IRR on this project?

User Account

All Pages