Answer to Question #207309 in Microeconomics for RAC

Question

Ashima has rs 88 with her. She intends to purchase chocolate and ice cream with this money.The market price of chocolate and ice cream per unit is rs 8. The total utility schedule for her is given below. Find out how many chocolates and ice cream should Ashima purchased that she will get maximum satisfaction

Answer 1

$rs 88$

$Market price of each chocolate and ice cream = rs 8$

$x:y (8) = rs 88$

Both the marginal utility for each product is not provided as well as total utility, it is assumed the ratio is 1:1 between chocolate and ice cream.

$Therefore,$

$= 88/8$ $= 11$

$Ratio 1:1$

Chocolate = $1/2 × 11$

$= 5.5 chocolates$

Rounded off to 6 chocolates

Ice cream = $1/2 × 11 = 5.5$

Rounded off = $6 ice creams$