A banana costs $0.50 and a piece of candy costs $0.25 at the local cafeteria. You have $1.25 in your pocket and you value money. The money-equivalent value (payoff ) you get from eating your first banana is $1.20, and that of each additional banana is half the previous one (the second banana gives you a value of $0.60, the third $0.30, and so on). Similarly the payoff you get from eating your first piece of candy is $0.40, and that of each additional piece is half the previous one ($0.20, $0.10, and so on). Your value from eating bananas is not affected by how many pieces of candy you eat and vice versa.
Required:
a. What is the set of possible actions you can take given your budget of $1.25?
b. Draw the decision tree that is associated with this decision problem.
c. Should you spend all your money at the cafeteria? Justify your answer with a rational choice argument.

a. What is the set of possible actions you can take given your budget of $1.25?

bananas          candies        total utils

0                        5                    $0.78

1                         3                     $1.90

2                        1                     $2.20

b. Draw the decision tree that is associated with this decision problem.

I attached a decision tree on PDF

c. Should you spend all your money at the cafeteria? Justify your answer with a rational choice argument.

Yes, since you can obtain more benefits from purchasing 2 bananas and 1 candy than the money that you have (total benefits $2.20 vs $1.25 in cash).

Explanation:

utility obtained from first banana $1.20, payoff per $ spent = 2.4

utility obtained from second banana $0.60, payoff per $ spent = 1.2

utility obtained from third banana $0.30, payoff per $ spent = 0.6

utility obtained from first candy $0.40, payoff per $ spent = 1.6

utility obtained from second banana $0.20, payoff per $ spent = 0.8

utility obtained from third banana $0.10, payoff per $ spent = 0.4

answer; i do believe that the correct answer is (6) points in georgia;

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!