-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $14, which of the following consumption combinations will you choose?
A) 3 slices of pizza and 1 Diet Pepsi
B) 2 slices of pizza and 3 Diet Pepsis
C) 1 slice of pizza and 5 Diet Pepsis
D) 0 slices of pizza and 7 Diet Pepsis

Question

-Suppose that you consume only pizza, which costs $4 per slice, and Diet Pepsi, which costs $2 each. The table above gives your utility from consuming these two goods. If your income is $14, which of the following consumption combinations will you choose?
A) 3 slices of pizza and 1 Diet Pepsi 
B) 2 slices of pizza and 3 Diet Pepsis 
C) 1 slice of pizza and 5 Diet Pepsis 
D) 0 slices of pizza and 7 Diet Pepsis

Quizplus · Accepted Answer

To maximize utility given the budget constraint, calculate the total cost and utility for each option. Option B costs $14 (2 slices of pizza at $4 each and 3 Diet Pepsis at $2 each) and provides the highest utility within the budget.

-Suppose That You Consume Only Pizza, Which Costs $4 Per