Eclairs Cream Puffs -The Table Gives the Total Utility Jamal Derives from the Utility

question 89

Essay

Eclairs Cream puffs

-The table gives the total utility Jamal derives from the consumption of eclairs and cream puffs. Jamal has $12 to spend on these two confectionery goods. The price of an eclair is $3 and the price of a cream puff is $1.50.
a) Jamal's budget is $12. In order for Jamal to maximize his utility, how many eclairs and cream puffs should he buy?
b) Suppose the price of an eclair increase to $6. Jamal's income does not change and neither does the price of a cream puff. What combination of eclairs and cream puffs will Jamal buy now?
c) Using your answers to parts (a) and (b), derive two points on Jamal's demand curve for eclairs.

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Definitions:

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The increase in satisfaction or usefulness gained from the consumption of an additional unit of a good or service.

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