Given that the following marginal utility schedule for commodity Y and commodity Z belong to Mr. Yaro, and that the price of Y and the price of Z are both N2, and Mr. Yaro spends all his income of N12 on both commodities Y and Z.
Q 1 2 3 4 5 6 7
MUy 16 13 10 6 4 3 1
MUz 14 10 8 5 3 2 1
a. Indicate how much of Y and Z, Mr. Yaro should purchase to maximize utility? b. Show that the condition for constrained utility maximization is satisfied when Mr. Yaro is at his optimum?
c. Determine how much total utility Mr. Yaro receives when he maximizes utility? d. How much utility would he get if he spend all his income on Y and Z.
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