Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal...


Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D.  Column 5 shows the marginal utility Ricardo gets from saving.  Assume that the prices of A, B, C, and D are $18, $6, $4, and $24, respectively, and that Ricardo has an income of $105.




  1. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?








  1. How many dollars will Ricardo choose to save?








  1. Check your answers by substituting them into the algebraic statement of the utility‑maximizing rule. In other words, show it works when using this rule.



Column 1<br>Units<br>Column 2<br>Column 3<br>Units<br>Column 4<br>Units<br>Units<br>of A<br>MU<br>of B<br>MU<br>of C<br>MU<br>of D<br>MU<br>72<br>1<br>24<br>1<br>15<br>1<br>36<br>54<br>2<br>15<br>2<br>12<br>2<br>30<br>45<br>3<br>12<br>3<br>8<br>3<br>24<br>36<br>4<br>4<br>7<br>4<br>18<br>5<br>27<br>7<br>5<br>5<br>13<br>6<br>18<br>6<br>5<br>6<br>4<br>6<br>7<br>7<br>15<br>7<br>2<br>7<br>3.5<br>7<br>4<br>8<br>12<br>8<br>1<br>3<br>8<br>2<br>1234<br>

Extracted text: Column 1 Units Column 2 Column 3 Units Column 4 Units Units of A MU of B MU of C MU of D MU 72 1 24 1 15 1 36 54 2 15 2 12 2 30 45 3 12 3 8 3 24 36 4 4 7 4 18 5 27 7 5 5 13 6 18 6 5 6 4 6 7 7 15 7 2 7 3.5 7 4 8 12 8 1 3 8 2 1234

Jun 08, 2022
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