Question

1.Use the table below to answer the following question. Assume that the price of product A is $4.47 while the price for product B is $5.79. The buyer has a budget of $50.

Q	MUA	MUB
1	22	25
2	21	24
3	20	23
4	19	22
5	18	21
6	17	20
7	16	19
8	15	18
9	14	17
10	13	16

Given the marginal utilities The optimal bundle is ____.

	A.	6 of product A and 4 of product B
	B.	5 of product A and 4 of product B
	C.	5 of product A and 3 of product B
	D.	6 of product A and 5 of product B
	E.	7 of product A and 3 of product B
	F.	5 of product A and 5 of product B

2. Reference: Ref 10-8 b

If the optimal bundle of a consumer (with Oranges on the horizontal axis) was ____ Oranges and ____ Starfruit, then if the price of Oranges was ____ and the price of Starfruit would need to be $5.

	A.	3; 2; $0.27
	B.	5; 5; $0.27
	C.	4; 3; $1.20
	D.	5; 5; $3.75
	E.	6; 4; $1.00

3. The figure below shows three budget constraints. Each of them represents three different prices for the price of X while the budget remains at $78.

Since points A, B, and C are points are where indifference curves are tangent to the budget constraint, we can see that ____.

	A.	the slope of the budget constraint remains the same
	B.	the slope of the indifference curves are equal to the slope of budget constrains at all points (A, B, and C)
	C.	the budget remains $78 while the price of Y changes
	D.	the ratio of prices must be the same at all three points (A, B, and C)
	E.	None of the above

4. The figure below shows three budget constraints. Each of them represents the same budget of $44.

If the price of X at point A is $4.00, then ____.

	A.	the price of X at point B must be less than the price of X at point C
	B.	the price of X must be the same as the price of Y at point C
	C.	the price of X must be less than $4.00 at point C
	D.	the price of X at point C must be less than the price of X at point B
	E.	None of the above

5. Reference: Ref 10-22

For Alaina, the marginal utility of the 4th cup of coffee is ____.

	A.	4
	B.	8
	C.	9
	D.	6

6.

Table: Consumer Equilibrium 1

Units of good X

Marginal utility good X

Units of good Y

Marginal utility good Y

1	20			1	12
2	16			2	10
3	12			3	8
4	8			4	6
5	4			5	4
6	0			6	2

Reference: Ref 10-4

(Table: Consumer Equilibrium 1) Assume that the price of both goods is $1 per unit, and you consume 3 units of good X and 3 units of good Y. To maximize utility, assuming that the goods are divisible, you would consume:

	A.	more of both X and Y.
	B.	less of both X and Y.
	C.	more of X and less of Y.
	D.	less of X and more of Y.

please help me with these

Answer 1

1)

Q	MU(A)	MU/P	MU(B)	MU/P
1	22	4.92	25	4.32
2	21	4.70	24	4.15
3	20	4.47	23	3.97
4	19	4.25	22	3.80
5	18	4.03	21	3.63
6	17	3.80	20	3.45
7	16	3.58	19	3.28
8	15	3.36	18	3.11
9	14	3.13	17	2.94
10	13	2.91	16	2.76

Budget = 50

The optimal bundle is where MU/P for both the goods are same

= 6 units of A and 4 units of B