total utility of total utility of
cheeseburgers french fries
0 0
20 8
36 14
48 18
56 20
60 20
What is the utility-maximizing combination of cheeseburgers and french fries if cheeseburgers are $2 and french fries are $1 and you have $7 to spend (and you can spend all of it).
Please help. I need this by midnight.
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If I read the chart right, the utility of 4 cheesburgers is 56, and of five fries 20. There is a missing column (number items) on the chart.
Lets do it with linear programming:
Make a graph, the vertical axis is cheeseburgers, the horizontal axis is fries.
You have seven dollars, so one point on the graph is (1,3) (that is one fries, three cheesburgers). Another point on the line is 3,2. Plot a line through those two points.Now, look at the corners. The corners are 7,0 and 1,3 (0,3.5 is not allowed), and 0,3.
Test each corner point for utility.
point value
0,3 48
1,3 56
7,0 probably 20
Looks like 1 fry and three cheesburgers is max utility.
I hope I read the utitily chart right.
To find the utility-maximizing combination of cheeseburgers and french fries, you can follow the steps below:
1. Start by looking at the given utility chart and identify the combinations of cheeseburgers and french fries along with their corresponding utility values.
2. Calculate the total utility for each combination by adding up the utility values of cheeseburgers and french fries.
3. Next, consider the prices of cheeseburgers and french fries. In this case, cheeseburgers cost $2 and french fries cost $1.
4. Determine the budget constraint. Since you have $7 to spend, you need to find the combinations of cheeseburgers and french fries that can be purchased within this budget.
5. Calculate the cost of each combination by multiplying the number of cheeseburgers by $2 and the number of french fries by $1.
6. Identify the combinations of cheeseburgers and french fries that can be purchased within the budget. These combinations should satisfy the following inequality: cost of cheeseburgers + cost of french fries ≤ $7.
7. Finally, compare the utility values of the combinations that satisfy the budget constraint and choose the combination with the highest utility.
Based on the provided data, since there is a missing column for the number of items, it's important to confirm the utility values for each combination. Once you have the correct utility values, you can proceed with the steps above to find the utility-maximizing combination within your budget.