Q1 at daves current consumption bundle involving positive, Ask an Expert

Economics

Q1. At Dave's current consumption bundle (involving positive units in both hot dogs and sodas) his marginal utility for hot dogs is 5 and his marginal utility for sodas is 4. If the price of one hot dog is $3 and the price of one soda is $2, is Dave currently maximizing his utility? If not, how should he reallocate his spending in order to increase his utility?

Q2. John spends $I on bottled water which he can buy in two sizes: 0.75 liter and 2 liter. The water is identical in the two sizes and John gets no utility from the containers themselves, only from the water. How to define a utility function?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9722194

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