Let's say that we eat only two goods: milkshakes and pizza where the price of each slice of pizza is $2 and the price of each shake is $1 and we only have $12 to spend.

Find Consumer equilibrium

Remember Budget Constraints Combinations 

Pizza $2				Milkshakes $1
Quantity	Marginal Utility	Total Utility		Quantity	Marginal Utility	Total Utility
1	90	90		1	80	80
2	80	170		2	70	150
3	70	240		3	60	210
4	60	300		4	50	260
5	50	350		5	40	300
6	40	390		6	35	335
7	35	425		7	30	365
8	30	455		8	25	390
9	25	470		9	20	410
10	20	490		10	15	425
11	10	500		11	10	435
12	0	500		12	5	440

Budget Constraint Points

Point	Pizza	Shakes	Total Utility
A	6	0
B	5	2
C	4	4
D	3	6
E	2	8
F	1	10
G	0	12

Answer rating: 100% (QA)

1 The budget constraint line shows the maximum combinations of goods t... View the full answer