The below table gives the total utility Jamal derives from the consumption

Author:

January 4th, 2018

The below table gives the total utility Jamal derives from
the consumption of eclairs and cream puffs. Jamal has $12 to spend on these two
confectionery goods. The price of an eclair is $3 and the price of a cream puff
is $1.50

a) Complete the table

Eclairs
Cream puffs

Quantity

(MU/P)

Quantity

(MU/P)

126

54.0

243

103.5

342

145.5

414

177.0

441

196.5

b)
Conclude
whether or not you follows the law of diminishing MU

c) What is your optimal combination of
éclairs and cream puffs?

d)
Draw the Total utility (TU) and Marginal Utility
(MU) for Ice cream and then conclude.

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