Homework Help: economics

Posted by christina on Monday, October 19, 2009 at 10:39am.

If tbone steak cost 12.00 a lb and 1st util is 48, 2nd is 42, and 3rd util is 36 and we also buy ground round at 4.00 a lb and we derive 24 utils for the 1st lb, 16 for the second and 12 for the third and all we have to spend is 40.00 then how many lbs. of t-bone and ground round do we have to buy to be in consumer equilibrium ?

economics - economyst, Monday, October 19, 2009 at 11:22am
To maximize utility, a consumer should purchase the item that provides the highest marginal utility per dollar. Then the next highest, then the next highest until the consumer runs out of money.
So divide the MUs by the price and keep picking items until you run out of money.

I get the consumer will choose 2.667 lbs tbone and 2 lbs ground round OR 2.333 lbs tbone and 3 lbs ground round. (both answers give the same total utility)

Answer this Question

Related Questions

Math - In a competition, only the top 3 horses recieve prizes. How many possible...
Algebra can u help - Word problem. You buy 6 lb turkey 3 lb coleslaw 4 lb cheese...
Math algebra - Word problem. You buy 6 lb turkey 3 lb coleslaw 4 lb cheese 4 lb...
math - you have to buy 100 animals. roosters cost 5.00, hens cost 1.00 and ...
arithmetic - THE SUM OF THE 2ND AND 5TH TERMS OF AN A.P IS 42. IF THE DIFFERENCE...
science - Is venus the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th or 9th smallest ...
Math - I have $100.00 dollars to spend to buy 100 animals. Cows cost $50.00 each...
Physics - I am a little confused about kinetic and potential energy regarding ...
Math - In a competition, only the top 3 horses recieve prizes. How many possible...
Math - If a 2 lb. piece of steak is sold for $10.88, how much should a 3 lb, 6 ...

For Further Reading

First Name:
School Subject:
Answer: