Suppose that Omar's marginal utility for cups of coffee is constant at 2.5 utils per cup no matter how many cups he drinks. In contrast, his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second, 8 for the third, and so on (that is, declining by 1 util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that he can spend only on doughnuts, coffee, or both. How big would that budget have to be before he will spend a dollar buying a first cup of coffee? Instructions: Enter your answer as a whole number
Suppose that Omar's marginal utility for cups of coffee is constant at 2.5 utils per cup no matter how many cups he drinks. In contrast, his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second, 8 for the third, and so on (that is, declining by 1 util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that he can spend only on doughnuts, coffee, or both. How big would that budget have to be before he will spend a dollar buying a first cup of coffee? Instructions: Enter your answer as a whole number
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 6P
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![Suppose that Omar's marginal utility for cups of coffee is constant at 2.5 utils per cup no matter how many cups he drinks. In contrast,
his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second, 8 for the third, and so on (that is, declining by 1
util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that
he can spend only on doughnuts, coffee, or both.
How big would that budget have to be before he will spend a dollar buying a first cup of coffee?
Instructions: Enter your answer as a whole number.
2$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d81010e-c27c-4703-bc6b-e89beddf180d%2F3b2a483f-8248-4154-b6d3-097f1acbb5fc%2Fuv3cu9_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that Omar's marginal utility for cups of coffee is constant at 2.5 utils per cup no matter how many cups he drinks. In contrast,
his marginal utility per doughnut is 10 for the first doughnut he eats, 9 for the second, 8 for the third, and so on (that is, declining by 1
util per additional doughnut). In addition, suppose that coffee costs $1 per cup, doughnuts cost $1 each, and Omar has a budget that
he can spend only on doughnuts, coffee, or both.
How big would that budget have to be before he will spend a dollar buying a first cup of coffee?
Instructions: Enter your answer as a whole number.
2$
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