Answer to Question #77477 in Microeconomics for Felix

Question

Potatoes cost Janice $1.00 per kilogram, and she has $6.00 that she could possibly spend on potatoes or other items. If she feels that the first kilogram of potatoes is worth $1.50, the second kilogram is worth $1.14, the third kilogram is worth $1.05, and all subsequent kilograms are worth $0.30, how many kilograms of potatoes will she purchase? What if she only had $3.00 to spend?

Answer 1

Potatoes cost Janice $1.00 per kilogram, and she has $6.00 that she could possibly spend on potatoes or other items. If she feels that the first kilogram of potatoes is worth $1.50, the second kilogram is worth $1.14, the third kilogram is worth $1.05, and all subsequent kilograms are worth $0.30, then she will purchase no more than 6 kilograms of potatoes according to her budget.
If she only had $3.00 to spend, then she will buy no more than 3 kilograms of potatoes according to her budget.