Units of x | MUx | Units of y | MUy |
---|---|---|---|

1 | 23 | 1 | 18 |

2 | 16 | 2 | 16 |

3 | 12 | 3 | 14 |

4 | 8 | 4 | 10 |

5 | 4 | 5 | 8 |

6 | 2 | 6 | 4 |

You are choosing between two goods, X and Y, and your marginal utility from each is as shown above.

Instructions: Enter your answers as whole numbers.

a. If your income is $9.00 and the prices of X and Y are $2.00 and $1.00, respectively, what quantities of each will you purchase to maximize utility? X=_units. Y = _units.

b. What total utility will you realize? _.

c. Assume that, other things remaining unchanged, the price of X falls to $1.00. What quantities of X and Y will you now purchase? X=units. Y= units.

d. Using the two prices and quantities for X, derive a demand schedule (a table showing prices and quantities demanded) for X.

Price | Quantity demand |
---|---|

? | ? |

? | ? |