You Have $5 to Spend on Any Combination of Goods

question 138

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:

Insider Trading

Illegal trading of a public company's stock or other securities by individuals with access to non-public information about the company.

Socialization

Is the process by which people learn to function in social life and become aware of themselves as they interact with others.

Career Criminal

An individual who commits crime as a means of livelihood, often engaging in criminal activities over an extended period.

Early Death

The occurrence of an individual's demise at a younger age than the statistical average life expectancy.