Quantity of Subscriptions to Economics Statistics Apps per Y

Quantity of Subscriptions to Economics Statistics Apps per Year Quantity of Subscriptions to Office Productivity Apps per Year Total Utility (utils) 30 50 60 68 72 75 Total Utility (utils) 600 1,100 1,500 1,800 2,000 2,100 4 Refer to the above table and assume that each year this consumer buys only annual subscriptions to economics statistics apps and subscriptions to office productivity apps. The price of a subscription to each type of economics statistics app is $2, and the subscription to each office productivity app is $60 per year. If the consumer\'s available income is $64 per year, the consumer will purchase ? economics statistics app s and ? office productivity app If the consumer\'s available income rises to $246, what will be the new combination of economics statistics apps and office productivity apps? economics statistics app(s)and office productivity app(s)

Solution

Qty TU MU MU/Price Qty of TU MU MU/ Price Eco Apps Off prod. App 1 30 30 15 1 600 600 10 2 50 20 10 2 1100 500 8.33 3 60 10 5 3 1500 400 6.67 4 68 8 4 4 1800 300 5 5 72 4 2 5 2000 200 3.33 6 75 3 1.5 6 2100 100 1.67 Now, With income $ 64. The consumer will buy 2 units of Economics App and 1 unit of Office productivity app. (this is due to fact that last unit of $ spent on each commodity gives equal Marginal utility per $ i.e. 10 per $) Now, When Income Rises to $ 246. The consumer will buy 3 units of Economic Apps and 4 units of Office Productivity app. (this is due to fact that last unit of $ spent on each commodity gives equal Marginal utility per $ i.e. 5 per $)