Potatoes cost Janice $1.00 per kilogram, and she has $5.00 that she could possibly spend on...

Potatoes cost Janice $1.00 per kilogram, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first kilogram of potatoes is worth $1.50, the second kilogram is worth $1.14, the third kilogram is worth $1.05, and all subsequent kilograms are worth $0.30, how many kilograms of potatoes will she purchase? What if she only had $2.00 to spend?

Janice will purchase with her original $5.00 of income.

Janice will purchase when her income is $2.00.

Solutions

Expert Solution

Janice will purchase potatoes as long as the worth of potatoes to Janice is atleast equal to the price of potatoes

Price of potatoes = 1

When income is 5, she will purchase 3 kg of potatoes as the worth of 3rd kg = 1.05 > 1 but the worth of 4th kg < 1

When income is 2, she will purchase 2 kg of potatoes as the worth of 3rd kg = 1.14 > 1 and she does not have income left to buy the 3rd kg although she would like to.

Rahul Sunny answered 2 years ago

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