Homework Answers
Utility maximizing condition is when marginal utility per dollar is equal for each good.
We can see from the table that :
MUA/PA = 10/5 = 2
So, MUB/PB should be equal to 2 to maximize utility . So, MUB/PB = X/10= 2 , therefore, X = 20.
And MUC/PC should be equal to 2 to maximize utility . So, MUC/PC = 18/9= 2.
MUD/PD should be equal to 2 to maximize utility . So, MUD/PD = 26/Y= 2 , therefore, Y=13.
And MUE/PE should be equal to 2 maximize utility . So, MUE/PE = Z/25= 2, therefore, Z= 50.
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