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Item 1Potatoes cost Janice $1.25 per kilogram, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first kilogram of potatoes is worth $1.50, the second kilogram is worth $1.14, the third kilogram is worth $1.05, and all subsequent kilograms are worth $0.30, how many kilograms of potatoes will she purchase? What if she only had $2.00 to spend? Janice will purchase  kilograms with her original $5.00 of income. Janice will purchase  kilograms when her income is $2.00.

Question

Item 1Potatoes cost Janice 1.25perkilogram,andshehas1.25 per kilogram, and she has 5.00 that she could possibly spend on potatoes or other items. If she feels that the first kilogram of potatoes is worth 1.50,thesecondkilogramisworth1.50, the second kilogram is worth 1.14, the third kilogram is worth 1.05,andallsubsequentkilogramsareworth1.05, and all subsequent kilograms are worth 0.30, how many kilograms of potatoes will she purchase? What if she only had 2.00tospend? Janicewillpurchase kilogramswithheroriginal2.00 to spend? Janice will purchase  kilograms with her original 5.00 of income. Janice will purchase  kilograms when her income is $2.00.

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Solution

Janice will purchase potatoes based on their worth to her until she runs out of money.

With 5.00,shewouldfirstbuythefirstkilogramfor5.00, she would first buy the first kilogram for 1.25 (since it's worth 1.50toher).Shenowhas1.50 to her). She now has 3.75 left. She would then buy the second kilogram for 1.25(sinceitsworth1.25 (since it's worth 1.14 to her). She now has 2.50left.Shewouldthenbuythethirdkilogramfor2.50 left. She would then buy the third kilogram for 1.25 (since it's worth 1.05toher).Shenowhas1.05 to her). She now has 1.25 left.

At this point, each additional kilogram is only worth 0.30toher,butcosts0.30 to her, but costs 1.25. Therefore, she would not purchase any more potatoes. So, with her original $5.00 of income, Janice will purchase 3 kilograms of potatoes.

If she only had 2.00tospend,shewouldbuythefirstkilogramfor2.00 to spend, she would buy the first kilogram for 1.25 (since it's worth 1.50toher).Shenowhas1.50 to her). She now has 0.75 left. Since the second kilogram costs 1.25butsheonlyhas1.25 but she only has 0.75 left, she would not purchase it. So, when her income is $2.00, Janice will purchase 1 kilogram of potatoes.

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