Question: Hamid consumes two commodities only, meat and potato. His marginal utility of a unit of meat is 300 and each unit is purchased at $5.

  1. Hamid consumes two commodities only, meat and potato. His marginal utility of a unit of meat is 300 and each unit is purchased at $5. Marginal utility of a unit of potato for Hamid is 50 and the cost of each unit is 10.

  1. Does Hamid consume an optimal combination of the two commodities? Why?

B) What do we recommend to him?

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