Eric Stevanus -2201756600 – LA28

Assignment 1:
Use the following table data to answer questions a,b and c:

Answer the next question(s) on the basis of the following two schedules which show the
amounts of additional satisfaction (marginal utility) which a consumer would get from
successive quantities of products J and K.
MU j MU k
a. Refer to the above data. If the consumer has a money income of $52
and the prices of J and K are $8 and $4 respectively, how will the Pj Pk
consumer maximize her utility by purchasing? 7 8
MU j MU k 6 7
. = 4 6
Pj Pk
= 4 product J and 5 product K ($52) 3 5
b. Refer to the above data. What level of total utility is realized from 2,5 3
the equilibrium combination of J and K, if the consumer has a money 2 2,5
income of $52 and the prices of J and K are $8 and $4 respectively? 1,5 2
Total utility product J = 56+48+32+24
= 160
Total utility poduct K = 32+48+24+20+12
= 116
Total utility = 160 + 116
= 276
c. Refer to the above data. If the consumer's money income were cut MU j MU k
from $52 to $28, and the prices of J and K remain at $8 and $4
Pj Pk
respectively, how many she would maximize her satisfaction by
purchasing? 7 8
MU j MU k 6 7
. = 4 6
Pj Pk
3 5
= 2 product J and 3 product K ($28)
2,5 3
2 2,5
1,5 2