Luc allocates his total monthly household expenditures between
only two goods, restaurant meals and “all other goods.” Suppose
the price of each restaurant meal is $20 and the price of each unit
of “all other goods” is $10. In each case below, assuming that Luc
is maximizing his utility, determine the marginal utility (MU
received from the good that is not mentioned.
a. The MU he is currently receiving from his consumption of
restaurant meals is 100.
b. The MU he is currently receiving from his consumption of
“all other goods” is 40.
c. The MU he is currently receiving from his consumption of
restaurant meals is 56.
d. The MU he is currently receiving from his consumption of
“all other goods” is 122.
Use the following diagram to answer the questions below about
marginal and total utility for the consumption of Good X.
