Explore BrainMass
Share

Explore BrainMass

    Marginal utility and optimal consumption

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The attached table displays George's consumption of soda pop and pretzels. The price of each soda pop is $2.00 and the price of each pretzel is $5.00.

    A. Fill in the missing total utility, marginal utility, and marginal utility/price (MU/Price). Place the final answer for each in the correct shaded area within the table.

    B. George has $28.00 to spend on soda pop and pretzels. Determine the number of cans of soda pop and pretzels that will be optimal for George. Explain your reasoning regarding how you chose that consumption point.

    © BrainMass Inc. brainmass.com May 20, 2020, 11:48 pm ad1c9bdddf
    https://brainmass.com/economics/microeconomics/marginal-utility-optimal-consumption-591977

    Attachments

    Solution Preview

    See the attachments.
    QUESTION A
    Bottles of Soda Pop Number of Pretzels
    Bottles of Soda Pop Consumed Total Utility Marginal Utility MU/Price Number of Pretzels Consumed Total Utility Marginal Utility MU/Price
    0 0 NA NA 0 0 NA NA
    1 20 20 10.00 2 50 50 10.00
    2 38 18 9.00 4 70 20 ...

    Solution Summary

    Solution offers Excel and Word documents showing how to find total utility, marginal utility and MU/price for soda pop and pretzels. A excel file is used in the calculations.

    $2.19

    ADVERTISEMENT