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Cardinal Utility Example

The document provides a marginal utility schedule for milk and sugar given a total income of Rs. 35. To maximize utility, the consumer should purchase 3 units of milk for Rs. 12 and 2 units of sugar for Rs. 10, spending their full income and achieving the highest total marginal utility of 62 utils.

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Abdul Majid Khan
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27 views1 page

Cardinal Utility Example

The document provides a marginal utility schedule for milk and sugar given a total income of Rs. 35. To maximize utility, the consumer should purchase 3 units of milk for Rs. 12 and 2 units of sugar for Rs. 10, spending their full income and achieving the highest total marginal utility of 62 utils.

Uploaded by

Abdul Majid Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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From the following information find the combination of Milk and Sugar

which gives maximum utility to the consumer.


05 Marks
Total income for spending = Rs 35
Two commodity= Milk and Sugar
Price of Milk = (PMilk ) = 4
Price of Sugar = (PSugar ) = 5

Table: Marginal utility Schedules


`No. of units consumed 𝐌𝐔𝐌𝐢𝐥𝐤 𝐌𝐔𝐒𝐮𝐠𝐚𝐫
1 40 55
2 36 50
3 32 30
4 28 20
5 24 15
6 20 05

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