Column 1 Column 2 Column 3 Column 4 Column 5
Units of A MU Units of B MU Units of C MU Units of D MU Number of Dollars Saved MU
1 72 1 24 1 15 1 36 $1 5
2 54 2 15 2 12 2 30 2 4
3 45 3 12 3 9 3 24 3 3
4 36 4 9 4 7 4 18 4 2
5 27 5 7 5 5 5 13 5 1
6 18 6 5 6 4 6 7 6 0.5
7 15 7 2 7 3.5 7 4 7 0.25
8 12 8 1 8 3 8 2 8 0.125

Columns 1 through 4 in the following table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are, respectively, $18, $6, $4, and $24 and that Ricardo has an income of $106.

a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?




units of A




units of B




units of C




units of D



b. How many dollars will Ricardo choose to save?



$



c. Check your answers by substituting them into the algebraic statement of the utility-maximizing rule.



($
1
×
+ $
×
+ $
×
+ $
×
+ $
) = $