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Question 8: Suppose that Igor maximizes his utility by spending his entire income on bats and

lizards. The marginal utility of each good is independent of the amount consumed of the other good.


IGOR's Marginal Utility

Marginal Utility

Quantity

Bats

Lizards

1

20

45

2

18

40

3

16

25

4

8

20

Igor's income is $16. The price of a bat is $2, and he buys 3 bats. If the marginal utility of the lizard he buys is 40. Calculate the price of a lizard using two separate methods.

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