Elaine loves receiving flowers and has a particular fondness for daisies and daffodils. Her relative preferences for the two flowers are illustrated by the set of utility curves in the diagram. The number at the bottom of each indifference curve indicates the amount of happiness she receives from the various combinations of daisies and daffodils on the curve. Elaine's boyfriend Jerry would like to give her enough flowers to provide her with 200 units of happiness, but would like to do so as inexpensively as possible.
a. If daisies sell for $3 and daffodils sell for $6, what is the minimum amount Jerry will have to spend?
b. Suppose that Jerry fails to make it to the flower store on time, so he quickly tucks the money he was planning to spend on flowers [as you determined in part (a)] in a card and gives it to Elaine. If Elaine spends the money on flowers, how much happiness will she receive from her purchase?

Transcribed Image Text:

Daisies 62 U400 U= 200 U= 100 0 Daffodils 31