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?

Understand the concept of government efficiency and the incentive structures of public agencies.

Identify the consequences of prolonged monetary contraction.

Evaluate the influence of special interest groups on policy decisions.

Grasp the theory and application of public choice analysis in economic and political contexts.

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Definitions:

Network Effect

The network effect is a phenomenon whereby a product, service, or platform increases in value to its users as the number of users expands, commonly seen in telecommunications and social media networks.

Product Or Service

is any good or service offered by a business to consumers to satisfy a need or want.

Class, Race, Gender

These are sociological categories used to differentiate and study the variations in social structures, experiences, and identities among people based on their socioeconomic status, ethnic background, and gender.

Social Characteristics

Social characteristics refer to the distinct features and qualities that define the structure and dynamics of a society, including its norms, values, and demographic attributes.