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Problem: Janice really likes potatoes. At best any other goods are worth less than a dollar to her, potatoes cost $0.50 per pound, and she has $6.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all subsequent pounds are worth $0.30.

Required:

Question 1: How many pounds of potatoes will she purchase?

Question 2: What if she only had $3.00 to spend?

Please explain and provide answer.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91808410
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