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(Solved): The following table shows the marginal utility for each of six units of \( X \) and \( Y \). The p ...



The following table shows the marginal utility for each of six units of \( X \) and \( Y \). The price of \( X \) is \( \$ 4

The following table shows the marginal utility for each of six units of \( X \) and \( Y \). The price of \( X \) is \( \$ 4 \) and the price of \( Y \) is \( \$ 2 \). a. Suppose that the consumer's income is \( \$ 20 \). Assuming that the consumer is a utility maximizer, use marginal analysis to determine the optimal consumption of good \( x \) and good \( y \), respectively. Show your work. b. Suppose that the consumer instead has \( \$ 26 \) to spend. Assuming that the consumer is a utility maximizer, use marginal analysis to determine the optimal consumption of good \( x \) and good \( y \), respectively. Show your work.


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a) The price of x is =$4, and the price of y is = $2. So, the budget line is 4X+2Y=20 The consumer is a utility maximizer so, at equilibrium, MUxPx=MU
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