Tabitha has 6 to spend she has the option to buy two goods


Tabitha has $6 to spend. She has the option to buy two goods: sandwiches and peppermints. Sandwiches cost $3 each, and peppermints cost $1 per bag. The table below shows the utility Tabitha derives from consuming sandwiches or peppermints at various levels of consumption.

a. In the table below, fill in the marginal utility per dollar for each level of consumption.

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b. How should Tabitha spend her first $ 3? Explain why.

c. How should Tabitha spend her remaining $ 3? Explain why.

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Econometrics: Tabitha has 6 to spend she has the option to buy two goods
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