Milkshakes Sodas

-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What combination of milkshakes and sodas maximizes Tom's utility?
A) 5 milkshakes and 0 sodas
B) 4 milkshakes and 2 sodas
C) 3 milkshakes and 4 sodas
D) 2 milkshakes and 6 sodas

Question

Milkshakes Sodas
 
-The table above shows Tom's total utility from milkshakes and sodas. Tom's total budget for milkshakes and sodas is $10.00 per week. Milkshakes cost $2.00 each and sodas cost $1.00 each. What combination of milkshakes and sodas maximizes Tom's utility?
A) 5 milkshakes and 0 sodas 
B) 4 milkshakes and 2 sodas 
C) 3 milkshakes and 4 sodas 
D) 2 milkshakes and 6 sodas

Quizplus · Accepted Answer

Tom's budget constraint is 2M + S = 10, where M is the number of milkshakes and S is the number of sodas. To maximize utility, Tom should consume the combination of milkshakes and sodas that gives him the highest total utility, subject to his budget constraint. The table shows that Tom's total utility is highest when he consumes 4 milkshakes and 2 sodas. This combination costs 2(4) + 1(2) = $10, which is within Tom's budget.

Milkshakes Sodas -The Table Above Shows Tom's Total Utility from Milkshakes and Utility