Carl has $20, which he’d like to spend on some combination o…
Carl has $20, which he’d like to spend on some combination of coconuts and pineapples. His goal is to maximize utility from consumption — we provide here his total utility for coconut and pineapple consumption: coconuts pineapples quantity total utility quantity total utility 1 60 1 80 2 112 2 144 3 156 3 192 4 196 4 224 5 228 5 240 Carl’s total utility is the sum of his utility from consuming coconuts and his utility from consuming pineapples. Coconuts cost $4 each. First, say that pineapples cost $8 each. If so, how many coconuts does Carl purchase? How many pineapples? What is his total utility? Say that the grocery store discounts pineapples to $4 each. Solve the problem again. How many coconuts does Carl purchase now? How many pineapples? What is his total utility?