Answer to Question #130007 in Economics of Enterprise for Mimi

Question

John likes coffee and cookies. The price for one cup of coffee is $1; the price for one cookie is $1. His marginal utility for coffee is 10 – x, where x is the amount of coffee. His marginal utility for cookies is 21 – 2y, where y is the number of cookies. How many cups of coffee and units of cookies will John buy if he has only $10?

Answer 1

$$x+y=10$$

$$\frac {10-x}{1}=\frac {21-2y}{1}$$

$$x=10-y$$

$$y=7$$

$$x=3$$