Answer:
To maximize utility, Bill can will buy one banana and one apple.
Explanation:
Utility maximisation refers to the concept that individuals and firms seek to get the highest satisfaction from their economic decisions.
For example, when deciding how to spend a fixed some, individuals will purchase the combination of goods/services that give the most satisfaction.
The theory of Utility maximization highlights two fators
- combination of goods
- Highest satisfaction that is cost effective
if a banana cost half as much as an apple,
Cost of banana = cost of apple/2
cost of apple - cost of banana × 2
Assuming the cost of one banana is $1
The cost of buying 6 bananas = 6×$1 = $6
the same $6 can only buy 3 apples
Therefore the price of apples is $2
If the total amount available = $6,
It can purchase one banana and one apple.
