Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn

Exercise 6

ADVANCED ANALYSIS Let MU A = z = 10 x and MU B = z = 21 2 y , where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and B-that is, x + y = 10. How is the $10 best allocated between A and B How much utility will the marginal dollar yield