You Have $5 to Spend on Any Combination of Goods

question 24

Essay

You have $5 to spend on any combination of goods A and B. The price of good A is $2 and the price of good B is $1. You have calculated the following utility values for yourself: $$\begin{array} { | c | c | c | c | c | c | c | } \hline \text { Units } & \mathrm { TU } _ { \mathrm { A } } & \mathrm { MU } _ { \mathrm { A } } & \mathrm { MU } _ { \mathrm { A } } / \mathrm { P } _ { \mathrm { A } } & \mathrm { TU } _ { \mathrm { B } } & \mathrm { MU } _ { \mathrm { B } } & \mathrm { MU } _ { \mathrm { B } } / \mathrm { P } _ { \mathrm { B } } \\\hline 0 & 0 & & & 0 & & \\\hline 1 & 16 & & & 30 & & \\\hline 2 & 30 & & & 50 & & \\\hline 3 & 40 & & & 58 & & \\\hline 4 & 46 & & & 64 & & \\\hline\end{array}$$ (a) Fill in the empty columns of the table.
(b) You have purchased 2 units of good A and 1 unit of good B. Are you maximizing your utility? If so, explain why. If not, what combination of goods should you buy?

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Definitions:

Reconstructive Process

The method by which memories are not merely retrieved but reconstructed, often influenced by various factors like biases and new information.

Short-Term Memories

The component of memory that temporarily holds a small amount of information for a short period of time, from seconds to minutes.

Long-Term Memories

Memories that can last from days to decades, encompassing everything from childhood events to academic knowledge.

Locus Of Causality

Attribution of behavior to either an aspect of the actor (internal) or to some aspect of the situation (external).