Quantity of Subscriptions to Economics Statistics Apps per Y

Quantity of Subscriptions to Economics Statistics Apps per Year Total Utility? (utils) Quantity of Subscriptions to Office Productivity Apps per Year Total Utility? (utils) 1 4040 1 400400 2 6060 2 700700 3 7676 3 850850 4 8686 4 950950 5 9191 5 1 comma 0001,000 6 9393 6 1 comma 0251,025 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 ?$22?, and the subscription to each office productivity app is ?$6060 per year. If the? consumer\'s available income is ?$128128 per? year, the consumer will purchase 44 economics statistics? app(s) and 22 office productivity? app(s). If the? consumer\'s available income risesrises to ?$190190?, what will be the new combination of economics statistics apps and office productivity? apps? economics statistics? app(s): 44 and office productivity? app(s): 22.

Solution

Units of TU MU MU/Price Units of TU MU MU/Price Eco.App $2 Off.Prod. $60 1 40 40 20 1 400 400 6.67 2 60 20 10 2 700 300 5 3 76 16 8 3 850 150 2.5 4 86 10 5 4 950 100 1.67 5 91 5 2.5 5 1000 50 0.83 6 93 2 1 6 1025 25 0.42 When Consumer income is $ 128 Consumer must consume 4 units of Economic app and 2 units of Off. Productivity App (This is because MU per $ at this consumption for both the products is equal i.e. 5 per $) When Consumer income rises to $ 190. Consumer must consume 5 units of Economic app and 3 units of Off. Productivity App (This is because MU per $ at this consumption for both the products is equal i.e. 2.5 per $)