Question

Astrid currently consumes only milk and honey. She drinks four quarts of milk priced at $3 per quart and gets 30 utils for the last quart. She consumes thirteen jars of honey at a price of $0.75 per jar and gets 7.5 utils for the last jar. Is Astrid maximizing her utility?

Answer 1

Answer:

Yes, the Astrid maximizing her utility

Explanation:

Given that

Utils for the last quart = 30

Per quart = $3

Honey price = $0.75

Utils of Last jar = 7.5

The calculation of maximum utility is given below:-

Per dollar utility gained by milk

= 30 ÷ 3

= 10 utils

Milk utility for $0.75

= 30 ÷ 3 × $0.75

= 7.5 utils

Therefore from the last quart the utility was same and the dollars was spent in last jar. So, Astrid can maximizing her utility.