Suppose Chastine chooses among 3 types of chocolates: Fruity (X), Milky (Y) and Nutty

(Z). The prices of X, Y and Z are, respectively, ₱10, ₱30 and ₱50. The total income of
the consumer is ₱650.

Solution:
1. Computing for marginal utility

Units of Total Marginal Units of Total Marginal

Good X Utility Utility Good Y Utility Utility
(Fruity) (Milky)
0 0 - 0 0 -
1 12 12 1 60 60
2 23 11 2 115 55
3 33 10 3 163 48
4 42 9 4 203 40
5 50 8 5 235 32
6 57 7 6 259 24
7 63 6 7 280 21
8 68 5 8 298 18
9 72 3 9 313 15
10 75 3 10 325 12

Units of Total Marginal

Good Z Utility Utility
(Nutty)
0 0 -
1 70 70
2 130 60
3 180 50
4 220 40
5 250 30
6 275 25
7 293 18
8 303 10
9 306 3
10 307 1
 2. Computing for each MU/P

Units of Marginal MU/P Units of Marginal MU/P

Good X Utility (Good X) Good Y Utility (Good Y)
(Fruity) (MU) P=₱10 (Milky) (MU) P=₱30
0 - - 0 - -
1 12 1.20 1 60 2
2 11 1.10 2 55 1.83
3 10 1 3 48 1.60
4 9 0.90 4 40 1.33
5 8 0.80 5 32 1.06
6 7 0.70 6 24 0.80
7 6 0.60 7 21 0.70
8 5 0.50 8 18 0.60
9 3 0.30 9 15 0.50
10 3 0.30 10 12 0.40

Units of Marginal MU/P

Good Z Utility (Good Z)
(Nutty) (MU) P=₱50 How many of each type of chocolate
0 - - should Chastine purchase to maximize
1 70 1.40 utility?
2 60 1.20
3 50 1
4 40 0.80 (₱10 x 8) + (₱30 x 9) + (₱50 x 6) = ₱650
5 30 0.60
6 25 0.50 ₱80 + ₱270 + ₱300 = ₱650
7 18 0.36
₱650 = ₱650
8 10 0.20
9 3 0.06
10 1 0.02

The consumer should purchase the combination of 8 pieces of fruity chocolate, 9

pieces of milky chocolate, and 6 pieces of nutty chocolate in order to maximize
his/her utility.