Homework Help is Here – Start Your Trial Now!
Business
Economics
3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money, and be better off. O Yes; the marginal utility he receives from his last pound of cheese equals that of his last pound of fruit. Cheese 500 For each of the following combinations of cheese and fruit, calculate the marginal utility per dollar from the last pound of cheese and the last pound of fruit. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. MUC Po 60 100 50 200 0 300 400 0 Fruit (Pounds per Year) 100 200, 30 200 300 400 FRUIT (Pounds per year) 500 MUF PF 600 Consumer Equilibrium? False v Suppose Larry has an "appetizer budget" of $1,355 per year, which he spends on cheese and fruit. To maximize his utility, Larry will purchase pounds of cheese and pounds of fruit per year.

3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money, and be better off. O Yes; the marginal utility he receives from his last pound of cheese equals that of his last pound of fruit. Cheese 500 For each of the following combinations of cheese and fruit, calculate the marginal utility per dollar from the last pound of cheese and the last pound of fruit. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. MUC Po 60 100 50 200 0 300 400 0 Fruit (Pounds per Year) 100 200, 30 200 300 400 FRUIT (Pounds per year) 500 MUF PF 600 Consumer Equilibrium? False v Suppose Larry has an "appetizer budget" of $1,355 per year, which he spends on cheese and fruit. To maximize his utility, Larry will purchase pounds of cheese and pounds of fruit per year.

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
See similar textbooks
icon
Related questions
Question
3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money, and be better off. O Yes; the marginal utility he receives from his last pound of cheese equals that of his last pound of fruit. Cheese 500 For each of the following combinations of cheese and fruit, calculate the marginal utility per dollar from the last pound of cheese and the last pound of fruit. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. MUC Po 60 100 50 200 0 300 400 0 Fruit (Pounds per Year) 100 200, 30 200 300 400 FRUIT (Pounds per year) 500 MUF PF 600 Consumer Equilibrium? False v Suppose Larry has an "appetizer budget" of $1,355 per year, which he spends on cheese and fruit. To maximize his utility, Larry will purchase pounds of cheese and pounds of fruit per year.
Transcribed Image Text:3. Finding the optimal combination of two goods - $2. Suppose that Larry buys Larry enjoys consuming both cheese and fruit. Each pound of cheese costs Pc = $1, and each pound of fruit costs PF 300 pounds of cheese and 200 pounds of fruit per year. The following graphs show his marginal utility curves for cheese and fruit. At his current consumption level, Larry's marginal utility from consuming the last pound of cheese he bought is MUC S 30 utils per pound, and his marginal utility from consuming the last pound of fruit he bought is MUF = 30 utils per pound. 60 40 30 IL 20 10 400 500 600 50 40 A 30 B C D 20 10 0 0 100 Is Larry currently maximizing his utility? Combination 200 300 CHEESE (Pounds per year) 300, 30 (Pounds per Year) 200 400 300 No; he could buy less cheese and more fruit, not spend any more money, and be better off. O No; he likes fruit and cheese more than other goods, so he should buy more of both. O No; he could buy more cheese and less fruit, not spend any more money, and be better off. O Yes; the marginal utility he receives from his last pound of cheese equals that of his last pound of fruit. Cheese 500 For each of the following combinations of cheese and fruit, calculate the marginal utility per dollar from the last pound of cheese and the last pound of fruit. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. MUC Po 60 100 50 200 0 300 400 0 Fruit (Pounds per Year) 100 200, 30 200 300 400 FRUIT (Pounds per year) 500 MUF PF 600 Consumer Equilibrium? False v Suppose Larry has an "appetizer budget" of $1,355 per year, which he spends on cheese and fruit. To maximize his utility, Larry will purchase pounds of cheese and pounds of fruit per year.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 13 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Utility Maximization
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Economics:
Economics:
Economics
ISBN:
9781285859460
Author:
BOYES, William
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
Economics
ISBN:
9781285635101
Author:
MCEACHERN
Publisher:
Cengage
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
SEE MORE TEXTBOOKS