You Have $5 to Spend on Any Combination of Goods

question 17

Essay

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

Learn the influence of external conditions on consumer perception and decision-making processes.

Understand how consumers' self-monitoring affects their interaction with products.

Recognize the influence of unconscious thought processes in consumer choices.

Identify different behavioral responses to shopping stressors and the concept of shrinkage in consumer psychology.

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