Essay
Lilly Davis has $5 per week to spend on any combination of ice cream and candy.The price of an ice cream cone is $2 and the price of a candy bar is $1.The table below shows Lilly's utility values.Use the table to answer the questions that follow the table.
a.Complete the table by filling in the blank spaces.
b.Suppose Lilly purchases 2 ice cream cones and 1 candy bar.Is she consuming the optimal consumption bundle? If so, explain why.If not, what combination should she buy and why?
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b.If Lilly purchases 2 ice cream c...View Answer
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Correct Answer:
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b.If Lilly purchases 2 ice cream c...
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