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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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Term
Fall
Professor
ISSE
Tags
Economics, Supply And Demand, Marv, new health spa
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Exploring Microeconomics
The document you are viewing contains questions related to this textbook.
Chapter 4 / Exercise 1
Exploring Microeconomics
Sexton
Expert Verified

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