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AP Microeconomics Optimal Consumption Problem Using the data below, answer the questions that follow this chart showing the marginal utility for goods A and B. Quantity 1 2 3 4 5 6 7 8 9 10 11 12 Good A $ 4 Marginal Utility 24 16 12 8 4 2 0 0 0 0 0 0 Good B $1 Marginal Utility 12 8 6 4 3 2 1 1 1 1 1 1 If a consumer has $12 to spend, and the Price of Good A is $4 and the Price of Good B is $1? a. Illustrate the consumer’s budget line and label each consumption bundle A-D: b. Complete the following table Consumption Bundle A B C D Quantity of Good A Utility of Good A Quantity of Good B Utility of Good B Total Utility c. Based on the information above, what is the consumer’s optimal consumption bundle? d. What is the total utility of the chosen combination? e. State the optimal consumption rule: f. How many of Good A and how many of Good B will the consumer buy based on this rule? g. Explain how you determined the number purchased of A and B.