Figure 21-19
The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies:

-Refer to Figure 21-19.Assume that the consumer has an income of $40.If the price of chocolate chips is $4 and the price of marshmallows is $4,the optimizing consumer would choose to purchase
A) 9 marshmallows and 6 chocolate chips.
B) 10 marshmallows and 10 chocolate chips.
C) 5 marshmallows and 5 chocolate chips.
D) 3 marshmallows and 9 chocolate chips.

Question

Figure 21-19
The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies:
 
-Refer to Figure 21-19.Assume that the consumer has an income of $40.If the price of chocolate chips is $4 and the price of marshmallows is $4,the optimizing consumer would choose to purchase
A) 9 marshmallows and 6 chocolate chips. 
B) 10 marshmallows and 10 chocolate chips. 
C) 5 marshmallows and 5 chocolate chips. 
D) 3 marshmallows and 9 chocolate chips.

Quizplus · Accepted Answer

The consumer's budget constraint is $40, and both chocolate chips and marshmallows cost $4 each. Therefore, the consumer can purchase a total of 10 items (40/4). Option C, which is 5 marshmallows and 5 chocolate chips, fits this budget constraint perfectly.

Figure 21-19 The Following Graph Illustrates a Representative Consumer's Preferences for Marshmallows