Arnie Ziffel Has $20 Per Week to Spend on Any

question 141

Essay

Arnie Ziffel has $20 per week to spend on any combination of pineapples and green tea.The price of a pineapple is $4 and the price of a bottle of green tea is $2.The table below shows Arnie's utility values.Use the table to answer the questions that follow the table.
$\begin{array}{|c|c|l|l|l|l|l|l|}\hline\text { Quantity }& & & \text { Marginal } & \text { Quantity }&\text { } &&\text { Marginal } \\\text { of }&\text { Total } & \text { Marginal } & \text { Utility per }&\text { of Green } & \text { Total }&\text {Marginal } &\text { Utility per } \\\text { Pineapples } & \text { Utility } & \text { Utility } & \text { Dollar } & \text { Tea } & \text { Utility } & \text { Utility } & \text { Dollar } \\\hline 1 & 32 & & & 1 & 28 & & \\\hline 2 & 52 & & & 2 & 46 & & \\\hline 3 & 64 & & & 3 & 54 & & \\\hline 4 & 68 & & & 4 & 60 & & \\\hline 5 & 70 & & & 5 & 64 & & \\\hline 6 & 71 & & & 6 & 66 & & \\\hline 7 & 71 & & & 7 & 67 & & \\\hline\end{array}$
a.Complete the table by filling in the blank spaces.
b.Suppose Arnold purchases 4 pineapples and 2 bottles of green tea.Is he consuming the optimal consumption bundle? If so,explain why.If not,what combination should he buy and why?

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Definitions:

Required Reserves

The dollar amount of reserves a bank is obligated by regulation to hold as cash in the bank’s vault or on account at the Fed.

Checkable Deposits

Bank accounts on which checks can be drawn. These include checking accounts and demand deposits that allow owners to write checks against their account balances.

Excess Reserves

Funds that banks hold over and above the regulatory requirement, which can influence the bank's ability to lend and the overall money supply.

Required Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by the central bank.