Micro Assignment Utility Theory.docx

Micro Assignment Utility Theory.docx - Micro...

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Micro Assignment-Utility Theory #1 Part 1 Budget= $9 Product A Price= $1 Product B Price=$3 Units Marginal Utility of A MU/$ of A Units Marginal Utility of B MU/$ of B 1 10 10 1 30 10 15 2 9 9 2 24 8 12 3 8 8 3 18 6 9 4 7 7 4 12 4 6 5 6 6 5 6 2 3 Calculate the MU/$ for each product, then spend the budget. How much of each product does the buyer buy? $9.00-1-3-1-3-1=0 3A and 2B Part 2 Now assume the price of product B is $2. Price of A is still $1. Recalculate the MU/$ of B and determine how much of product A and B the buyer chooses. $9.00-2-2-2-1-1-1=0 3A and 3B Using the resulting two prices and quantities of product B from parts 1 and 2, plot the points on a line
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