Economics

Marc is shopping for pencil cases and candles. He has a budget of $100. The price of a pencil cases is $20 and the price of candles is $5. a) Complete the table-(2 marks) Pencil cases Candles Quantity TU MU MU/P Quantity TU MU MU/P 0 0 0 0 1 220 1 85 2 400 2 150 3 540 3 195 4 640 4 220 5 700 5 235 b) Conclude whether or not we follow the law of diminishing MU-(1.5 marks) c) What is optimal combination of pencil cases and candles? (2 marks) c) Draw the Total utility (TU) and Marginal Utility (MU) for candles and then conclude.