Table 56 Shows Nelson's Total Utility for Goods a and

question 72

Essay

Table 5.6 shows Nelson's total utility for Goods A and
B.
Table 5.6

Suppose the prices for both Good A and B are $1 each.
a)If Nelson's budget is $3,what will his consumption bundle?
b)If Nelson's budget is $4,what will his consumption bundle?
c)If Nelson's budget is $6,what will his consumption bundle?
d)If Nelson's budget is $10,what will his consumption bundle?
a)1 unit of Good A and 2 units of Good
B.
b)2 units of Good A and 2 units of Good
B.
c)3 units of Good A and 3 units of Good
B.
d)3 units of Good A and 4 units of Good
B.(You would not purchase more of either since the MUs of additional units are negative).

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Definitions:

Utility

Utility is the total satisfaction or benefit derived from consuming a good or service.

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