In: Economics
Ans.
Two goods, services, or activities that we currently enjoy but our marginal utility per dollar (or per unit of time) for the two goods is not equal are :
Good X- Movie = Spend 70 percent of money
Good Y- Paying Game = Spend 30 percent of money
A good initial phase in deciding how a purchaser will choose to allot their salary is knowing the fulfillment they get from a good. Be that as it may, before the ideal add up to purchase of any good the cost should likewise be thought of. As such, what is the "blast per buck" that a purchaser will get from the good?
We can decide the utility a purchaser gets utilizing the marginal utility per dollar spent, or MU/$.
To decide the MU/$, we partition the marginal utility a customer gets at a specific degree of utilization by the cost of the good.
To maximise the utility the consumer should spend more money on X and and less money on the other y good.
We can describe the utility function as u(x,y) = 0.7x+0.3y.