Optimal consumption bundle to maximize utility

Reference no: EM1315700

The table below shows the marginal utility a costumer would get by purchasing various quantities of A, B, and C. The product prices for A, B, and C are $3, $2, and $1 respectively. The consumer has $20 to spend on the three products. What combination of the three products should be purchased in order to maximize utility?

Unit of product	(1) Marginal utility, A	(2) Marginal utility, B	(3)Marginal utility, C
First	30	22	12
Second	27	20	10
Third	24	18	8
Fourth	21	16	6
Fifth	18	14	4
Sixth	15	12	2

(a) 5 units of A, 6 units of B, and 4 units of C.
(b) 2 units of A, 5 units of B, and 4 units of C.
(c) 3 units of A, 4 units of B, and 3 units of C.
(d) 4 units of A, 3 units of B, and 2 units of C.

Reference no: EM1315700

Questions Cloud

Probability regarding sample space of an experiment : Let S = {c, h, j, q, t, y} be a sample space of an experiment and let E = {c, h}, F = {c, q, y}, and G = {h, j, t} be events of this experiment. (Enter your answers using roster notation. Enter Ø for the empty set.)

Determining valid density function : Verify that this is valid density function. Find out probability that weight is smaller than 24 ounces.

Static classical ad or yp model : Using the static classical AD/YP model, demonstrate the effect of each of the following changes.

Compute the growth duration of each company stock : Compute the growth duration of each company stock relative to the S&P Industrials and evaluate the growth duration of Company A relative to Company B.

Optimal consumption bundle to maximize utility : The table below shows the marginal utility a costumer would get by purchasing various quantities-What combination of the three products should be purchased in order to maximize utility?

Determining the marginal density : On randomly selected day, let X and Y, respectively, be proportions of time that the drive-in and walk-in facilities are in use. Determine the marginal density of X.

Calculation of the implied growth duration of various compan : Calculation of the implied growth duration of various companies and decision making - Compute the growth duration of each company stock relative to the S&P Industrials and evaluate the growth duration of Company A relative to Company B.

Estimating value of probability of discrete distribution : Determine the event that the sum of the numbers falling uppermost is less than or equal to 7

Filling blanks from utility theory : The entire satisfaction consumer gets from consuming a good or service is________ utility, but the extra or additional satisfaction that a consumer gets from a good or service is ________ utility.

User Account

All Pages