Andy purchases only two goods, apples (a) and kumquats( He has an income of $1,2

Question

Andy purchases only two goods, apples (a) and kumquats( He has an income of $1,280 and can buy apples at $8 per pound and kumquats at $8 per pound. His utility function is U(a, k) 5a 6k. What is his marginal utility for apples and his marginal utility for kumquats? Andy's marginal utility for apples (MUa) is MU5 and his marginal utility for kumquats (MUk) is MU 6 (Enter your responses as whole numbers.) What bundle of apples and kumquats should he purchase to maximize his utility? Andy should consume apples and kumquats (Enter your responses as whole numbers)

Explanation / Answer

Since the marginal utility gained from kumquats is always greater than that of apples and umquats and apples have the same price, so Andy will spend all his income on consuming kumquats.

Thus andy will consume 1280/8=160 kumquats and 0 apples

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