Suppose the price of a pair of jeans is $20 and the price of a T-shirt is $10. Suppose further that a consumer can spend a maximum of $100 on T-shirts and jeans. Which of the following is the most affordable bundle for maximizing the consumer's utility?
A)10 T-shirts and 5 pairs of jeans
B)2 T-shirts and 4 pairs of jeans
C)4 T-shirts and 2 pairs of jeans
D)Only 4 pairs of jeans
E)5 T-shirts and 10 pairs of jeans

Question

Quizplus · Accepted Answer

Given the prices, the consumer can afford a maximum of $100 worth of goods. Option B (2 T-shirts at $10 each and 4 pairs of jeans at $20 each) totals $100 exactly, fitting the budget constraint and allowing for a mix of items, potentially maximizing utility.

Suppose the Price of a Pair of Jeans Is $20