a) The table above shows Jessica’s marginal utility (MU)
from consuming two products: pretzels and Eskimo Bars.
(i) What is her total utility from purchasing three (3) Eskimo Bars?
(ii) Jessica’s weekly income is $11, the price of a pretzel is $2, and the price of an Eskimo Bar is $1.
What combination of purchases will maximize Jessica’s utility if she spends her entire weekly
income on pretzels and Eskimo Bars?
Explainyour answer using marginal analysis.
(b) Assume that the price of wheat, an input for the production of pretzels, increases. Will Jessica’s
demand for pretzels increase, decrease, or not change?
(c) Suppose that when the price of Eskimo Bars increases by 10 percent, Theresa buys 5 percent fewer Instructions: Answer the questions. Submit both the Excel Worksheet and your responses on
this word document for full credit.
Assume Jessica consumes both pretzels and Eskimo Bars.