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Summit has ₹90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is ₹10. The marginal utility schedule of goods X and Y is given below. Find out how many units of X and Y should Summit purchase so that he gets maximum satisfaction.?
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Summit has ₹90 with him. He intends to purchase goods X and Y with his...



Optimizing Utility with Marginal Utility Schedule
The first step in determining the optimal purchase quantities of goods X and Y is to analyze their marginal utility schedule.

Marginal Utility Schedule:
  • Good X: 1st unit - 15 utils, 2nd unit - 12 utils, 3rd unit - 10 utils
  • Good Y: 1st unit - 20 utils, 2nd unit - 18 utils, 3rd unit - 15 utils



Calculating Marginal Utility per Rupee:
To find out the marginal utility per rupee for each good, divide the marginal utility by the price of the good.
  • Good X: 1st unit - 1.5 utils per rupee, 2nd unit - 1.2 utils per rupee, 3rd unit - 1 utils per rupee
  • Good Y: 1st unit - 2 utils per rupee, 2nd unit - 1.8 utils per rupee, 3rd unit - 1.5 utils per rupee



Optimal Purchase Decision:
Summit should continue purchasing units of X and Y until the marginal utility per rupee of each good is equal. This is because he wants to maximize his total utility with the limited budget.

Conclusion:
To maximize satisfaction, Summit should purchase 2 units of X and 1 unit of Y, as this is where the marginal utility per rupee is equal for both goods. This allocation will ensure the most efficient use of his ₹90 budget.
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Summit has ₹90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is ₹10. The marginal utility schedule of goods X and Y is given below. Find out how many units of X and Y should Summit purchase so that he gets maximum satisfaction.?
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Summit has ₹90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is ₹10. The marginal utility schedule of goods X and Y is given below. Find out how many units of X and Y should Summit purchase so that he gets maximum satisfaction.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Summit has ₹90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is ₹10. The marginal utility schedule of goods X and Y is given below. Find out how many units of X and Y should Summit purchase so that he gets maximum satisfaction.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Summit has ₹90 with him. He intends to purchase goods X and Y with his money. The market price of X and Y per unit is ₹10. The marginal utility schedule of goods X and Y is given below. Find out how many units of X and Y should Summit purchase so that he gets maximum satisfaction.?.
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