Question

If your income was ​$40 and the price of pizzas was ​$5 and the price of videos was ​$4​, what combination of pizzas and videos would maximize your​ utility?

Answer 1

Answer:

4 pizza and 4 videos

Explanation:

let p represent the number of pizza

let v represent the number of videos

Total income = $40

Price of pizza = $5

Price of video = $4

Price of pizza and video = $5 + $4

= $9

Total amount spent on pizza = (5/9)* 40

= 200/9 = $22.22

Total number of pizza bought = 22.22/5 = 4.4

= 4 pizza(approximately)

Total amount spent on video = (4/9)*40 = 160/9

= 17.77

Total number of videos = 17.77/4 = 4.44 = 4 videos (approximately)

Answer 2

Answer: 4 pizzas and 5 videos

Explanation:

Income= $40

Price of pizza= $5

Price of video= $4

Let pizza be represented as p

Let video be represented as v

5p + 4v = 40

Solving further, the amount of pizza and video that will maximize utility are 4 and 5 respectively.