Lilly Davis Has $5 Per Week to Spend on Any

question 291

Essay

Lilly Davis has $5 per week to spend on any combination of ice cream and candy.The price of an ice cream cone is $2 and the price of a candy bar is $1.The table below shows Lilly's utility values.Use the table to answer the questions that follow the table.
$\begin{array}{|c|c|c|c|c|c|c|}\hline\begin{array}{c}\text { Quantity } \\\text { of Ice } \\\text { Cream } \\\text { Cones }\end{array} & \text { Total } & \begin{array}{c}\text { Utility } \\\text { Utility }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Utility per } \\\text { Dollar }\end{array} & \begin{array}{c}\text { Quantity } \\\text { of Candy }\end{array} & \begin{array}{c}\text { Total } \\\text { Utility }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Utility }\end{array} \\\hline 1 & 20 & & & 1 & 20 & \\\hline 2 & 38 & & & 2 & 38 & \\\hline 3 & 52 & & & 3 & 48 & \\\hline 4 & 62 & && 4 & 54 & \\\hline\end{array}$
a.Complete the table by filling in the blank spaces.
b.Suppose Lilly purchases 2 ice cream cones and 1 candy bar.Is she consuming the optimal consumption bundle? If so,explain why.If not,what combination should she buy and why?

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