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getsetgo, Master's Degree
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Economists refer to consumer satisfaction as utility and use

Resolved Question:

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:

# XXXXX Cookies Total Utility (Utils) Glasses of Milk Total Utility (Utils)
0 0 0 0
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.
Submitted: 6 years ago.
Category: Business and Finance Homework
Expert:  getsetgo replied 6 years ago.
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