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# \$1.00Economics

• From Economics: General-Economics
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• Due on Sep. 10, 2012
• Asked on Sep 08, 2012 at 3:04:40PM

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Q:

Economists refer to consumer satisfaction as utility and use "utils" to measure consumer utility. Jill enjoys cookies and milk as a snack. Below is a table showing Jill's utility from consuming cookies and milk:

 Total Utility (Utils) # of Cookies Total Utility (Utils) Glasses of Milk 1 300 1 600 2 500 2 700 3 600 3 720 4 650 4 730

If a cookie costs \$1 and a glass of milk is \$1, what combination of cookies and milk will provide Jill with the greatest total utility if she has \$5 to expend?

Now suppose that a cookie costs \$1 and a glass of milk costs \$2. Is Jill in consumer equilibrium if she consumes one cookie and one glass of milk? Please explain how you arrived at your answer.

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• Posted on Sep 08, 2012 at 5:31:52PM
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