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Suppose Mary is in consumer equilibrium. The marginal utility of good A is 30, and the price of good A is $2.. . a. if the price of good B is $4, the price of good C is $3, the price of good D is $1, and the price of all other goods and services is $5, what is the marginal utility of each goods mary is purchasing?. . b. If mary has chosen to keep $10 in savings, what is the ratio of MU to P for savings?

Verified Answer :

syed514

Using formula: Marginal Utility=Change in Total Utility/Change in Quantity
So, the marginal utility of each good will be 30/$2, or 15/$1.
Multiply this marginal utility by the price of each good/service to obtain the marginal utility per unit of good.
Since marginal utility of good A is given then by using this formula
the the marginal utility of good B is 60 , MU of good C is 45 and MU of good D is 15

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