Table 10-4

-Refer to Table 10-4. For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis. Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches. Which of the following statements is false?
A) The price of steak and cheese sandwiches is $4. The price of grilled chicken sandwiches is $2.
B) If Mabel maximizes her utility, she will buy three grilled chicken sandwiches.
C) If Mabel maximizes her utility, she will buy two steak and cheese sandwiches.
D) We do not have enough information to determine how many sandwiches Mabel will buy to maximize her utility.

Question

Table 10-4
 
-Refer to Table 10-4. For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis. Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches. Which of the following statements is false?
A) The price of steak and cheese sandwiches is $4. The price of grilled chicken sandwiches is $2. 
B) If Mabel maximizes her utility, she will buy three grilled chicken sandwiches. 
C) If Mabel maximizes her utility, she will buy two steak and cheese sandwiches. 
D) We do not have enough information to determine how many sandwiches Mabel will buy to maximize her utility.

Quizplus · Accepted Answer

The marginal utility per dollar allows us to determine the optimal combination of sandwiches Mabel should buy to maximize her utility given her budget constraint.

Table 10-4 -Refer to Table 10-4. for Steak and Cheese and Grilled