The data presented in Table 1 below has the utility function schedule of an individual with an income of $500. The individual’s objective is to maximise utility when consuming two products – Rice and Legumes. Do the following a. Derive the Total Utility schedule for Legumes and the Marginal Utility schedule for Rice. b. Determine the equilibrium consumption of Legumes and Rice before the price change in Legumes c. Determine the equilibrium consumption of Legumes and Rice after the price change in Legumes d. Derive the demand curve for Legumes Units Consumed Legumes ($100) New Price of Legumes ($50.00) Rice ($50.00) TU MU MU/P MU/P* TU MU MU/P 0 0 0 0 1 1200 500 2 1000 900 3 900 1250 4 800 1550 5 600 1800 6 300 2000 7 200 2150
The data presented in Table 1 below has the utility function schedule of an individual with an income of $500. The individual’s objective is to maximise utility when consuming two products – Rice and Legumes. Do the following
a. Derive the Total Utility schedule for Legumes and the
b. Determine the equilibrium consumption of Legumes and Rice before the price change in Legumes
c. Determine the equilibrium consumption of Legumes and Rice after the price change in Legumes
d. Derive the demand curve for Legumes
|
Units Consumed |
Legumes ($100) |
New Price of Legumes ($50.00) |
Rice ($50.00) |
||||
|
|
TU |
MU |
MU/P |
MU/P* |
TU |
MU |
MU/P |
|
0 |
0 |
0 |
|
|
0 |
|
|
|
1 |
|
1200 |
|
|
500 |
|
|
|
2 |
|
1000 |
|
|
900 |
|
|
|
3 |
|
900 |
|
|
1250 |
|
|
|
4 |
|
800 |
|
|
1550 |
|
|
|
5 |
|
600 |
|
|
1800 |
|
|
|
6 |
|
300 |
|
|
2000 |
|
|
|
7 |
|
200 |
|
|
2150 |
|
|
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