Unit 2: Elasticity, Consumer Choice, Costs

Lesson 6a: Consumer Decisions: Utility Maximization

Key Problems

How to plot MU at the midpoint How to find the Utility Maximizing Quantities to Buy   Click on the links above to learn how to do these problems: HOW TO PLOT MARGINAL UTILITY (MU) AT THE MIDPOINT HOW TO FIND THE UTILITY MAXIMIZING QUANTITIES TO BUY Use the data below to calculate the utility maximizing quantities to buy (What quantities would a rational consumer buy?) AND what is the maximum total utility (TU) possible? Assume the price of X is $2 and the price of Y is $4. The consumer has $20 of income to spend.

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