View the step-by-step solution to:

# Use the following to answer the questions below: z is the marginal utility per dollar measured in utils, x is the amount spent on product A, and y is...

Use the following to answer the questions below:

• z is the marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B.
• Assume MUA = z = 30 – x and MUB = z = 63 – 2y.
• Assume that the consumer has \$30 to spend on A and B; that is, x + y = 30. What is the marginal utility per dollar? What is best way to allocate the expenditure of the \$30?

Both MU per dollar should be equal in equilibrium, thus: 10-x=21-2y , which simplifies to: x=2y-11 Budget constraint... View the full answer

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents