Monday, November 7, 2011

(Advanced ysis)?

Let MU(a) = z = 10 – x and MU(b) = z= 21 -2y, where z is marginal utility measured in utils, x is the amount spent on product A, and y is the amount spent on B. ume the consumer has $10 to spend on A and B; that is, x + y = 10. How is this $10 best allocated between A and B? How much utility will the marginal dollar yield?

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