The document discusses two strategies for transporting eggs without breaking them. Strategy 1 has three possible outcomes of 0, 6, or 12 unbroken eggs, represented by a blue line. Strategy 2 has five possible outcomes between 0-12 unbroken eggs. It determines the utility for 6 unbroken eggs would be highest if obtaining them in one trip. It then draws a green concave curve to represent the utility for Strategy 2 outcomes based on the diminishing marginal utility of additional unbroken eggs. Strategy 2's other outcomes are also represented on the graph.
The document discusses two strategies for transporting eggs without breaking them. Strategy 1 has three possible outcomes of 0, 6, or 12 unbroken eggs, represented by a blue line. Strategy 2 has five possible outcomes between 0-12 unbroken eggs. It determines the utility for 6 unbroken eggs would be highest if obtaining them in one trip. It then draws a green concave curve to represent the utility for Strategy 2 outcomes based on the diminishing marginal utility of additional unbroken eggs. Strategy 2's other outcomes are also represented on the graph.
The document discusses two strategies for transporting eggs without breaking them. Strategy 1 has three possible outcomes of 0, 6, or 12 unbroken eggs, represented by a blue line. Strategy 2 has five possible outcomes between 0-12 unbroken eggs. It determines the utility for 6 unbroken eggs would be highest if obtaining them in one trip. It then draws a green concave curve to represent the utility for Strategy 2 outcomes based on the diminishing marginal utility of additional unbroken eggs. Strategy 2's other outcomes are also represented on the graph.
The document discusses two strategies for transporting eggs without breaking them. Strategy 1 has three possible outcomes of 0, 6, or 12 unbroken eggs, represented by a blue line. Strategy 2 has five possible outcomes between 0-12 unbroken eggs. It determines the utility for 6 unbroken eggs would be highest if obtaining them in one trip. It then draws a green concave curve to represent the utility for Strategy 2 outcomes based on the diminishing marginal utility of additional unbroken eggs. Strategy 2's other outcomes are also represented on the graph.
increase or decrease(I have made 4 points). Take strategy 1. In strategy one, there are three possible outcomes. 0 unbroken eggs, 6 unbroken eggs or 12 unbroken eggs. So draw a line(blue line) passing through (0,0) ,(6,6) and (12,12) . Strategy 2 has 5 outcomes. 0 unbroken eggs, 3 unbroken eggs, 6 , 9 and 12. But we have to know the utility in each case. lets take 6 unbroken eggs. In case of 6 unbroken eggs, there are 3 ways. 1) 3 in 1st trip and 3 in 2nd trip. 2) 6 in 1st trip. 0 in 2nd trip and vice versa. If you take 6 in the 1st trip , you have the maximum utility(reasons like, you just have to carry less so reach fast etc etc) . So draw a line(green line) from zero to the concave curve(Concave because of Diminishing marginal utility law). Now take 3 unbroken eggs. in case of 3 unbroken eggs, marginal utility will be half of that of 6. Take 9 unbroken eggs, utility will more than carrying 6 and less than getting 12. So draw a straight line here(red line)