3. Again consider the information shown for Fred in the table to the right. Suppose the price of beer increases to $2 but his daily income remains $12. Fred's new optimal consumption bundle will be:
- 1 brat and 5 beers.
- 2 brats and 4 beers.
- 3 brats and 3 beers.
- 4 brats and 2 beers.
- 5 brats and 1 beer.
|
Fred's Marginal Utility |
Q |
MU Brats |
MU Beer |
1 |
16 |
11 |
2 |
14 |
10 |
3 |
12 |
9 |
4 |
10 |
8 |
5 |
8 |
7 |
6 |
6 |
6 |
7 |
4 |
5 |
8 |
2 |
4 |
|