The relationship between the marginal utility that David gets from eating ice cream sundaes and the number of ice cream cones he eats per week is as follows: David receives 3 units of utility from the last dollar spent on each of the other goods he consumes.If ice cream sundaes cost $4 each,how many ice cream sundaes will he consume per month if he maximizes utility?

Question

The relationship between the marginal utility that David gets from eating ice cream sundaes and the number of ice cream cones he eats per week is as follows:  David receives 3 units of utility from the last dollar spent on each of the other goods he consumes.If ice cream sundaes cost $4 each,how many ice cream sundaes will he consume per month if he maximizes utility?

Quizplus · Accepted Answer

To maximize utility, David should consume ice cream sundaes until the marginal utility derived from consuming the last ice cream sundae is equal to the marginal utility derived from consuming the last dollar spent on other goods.

From the given information, we know that David receives 3 units of utility from the last dollar spent on each of the other goods he consumes. So, the marginal utility from the last dollar spent on other goods is 3.

The marginal utility from consuming ice cream sundaes is given by the function: 11eb0eb5_b9e0_aa16_9431_75f5ec0a0ba9_TB4799_00

We need to find out how many ice cream sundaes David will consume per month if he maximizes utility. Let's do this step-by-step:

- If David consumes 0 ice cream sundaes, his marginal utility is 12.8.
- If David consumes 1 ice cream sundae, his marginal utility is 8.4.
- If David consumes 2 ice cream sundaes, his marginal utility is 5.2.
- If David consumes 3 ice cream sundaes, his marginal utility is 3.2.
- If David consumes 4 ice cream sundaes, his marginal utility is 1.6.
- If David consumes 5 ice cream sundaes, his marginal utility is 0.4.

We can see that the marginal utility from consuming ice cream sundaes decreases as David consumes more of them. Therefore, to maximize utility, David should consume ice cream sundaes until the marginal utility from consuming the last ice cream sundae is equal to the marginal utility from consuming the last dollar spent on other goods, which is 3.

From the marginal utility function, we can see that the marginal utility of consuming the third ice cream sundae is 3.2, which is the closest to 3. Therefore, David should consume 3 ice cream sundaes per month to maximize his utility.

So, the answer is: 
Answer: B (3 ice cream sundaes)
 David should consume 3 ice cream sundaes per month to maximize his utility, as the marginal utility from consuming the last ice cream sundae is 3.2, which is the closest to the marginal utility from consuming the last dollar spent on other goods, which is 3.

The Relationship Between the Marginal Utility That David Gets from Eating