# Quiz #1 - MGE 302: Quiz #1 1. A consumer with an income of...

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MGE 302: Quiz #11. A consumer with an income of \$400 is spending it all on 12 units of good X and 18units of good Y. The price of X is \$40 and the price of Y is \$20. The marginal utility of thelast X is 40 and the marginal utility of the last Y is 10.a)What should the consumer do?b) what is the maximum amount of good X that can be purchased if X and Y are theonly two goods available for purchase and px= 40, py=\$20, Y=0 , and income 400.c) what is the maximum amount of good Y that can be purchased if X and Y are theonly two goods available for purchase and px= \$40, py=\$20, X=0, and income 400.d) is this the utility maximizing choice for this consumer and why?
2. The marginal rate of substitution (MRS) determines the rate at which a consumer iswilling to substitute between two goods in order to achiev

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##### We have textbook solutions for you!
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Chapter 4 / Exercise 1
Exploring Microeconomics
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