-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the quantity of water and the quantity of hamburgers that will maximize the consumer's total utility?
A) 5 bottles of water and 4 hamburgers
B) 4 bottles of water and 4 hamburgers
C) 1 bottle of water and 6 hamburgers
D) 6 bottles of water and 6 hamburgers

Question

-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the quantity of water and the quantity of hamburgers that will maximize the consumer's total utility?
A) 5 bottles of water and 4 hamburgers 
B) 4 bottles of water and 4 hamburgers 
C) 1 bottle of water and 6 hamburgers 
D) 6 bottles of water and 6 hamburgers

Quizplus · Accepted Answer

The consumer's total utility is maximized when the marginal utility of water is equal to the marginal utility of hamburgers, and the budget constraint is satisfied. In this case, the marginal utility of water is 10, and the marginal utility of hamburgers is 5. The budget constraint is 13 = 1 * Qw + 2 * Qh, where Qw is the quantity of water and Qh is the quantity of hamburgers. Solving for Qw, we get Qw = 13 - 2 * Qh. Substituting this into the equation for the marginal utilities, we get 10 = 5 * (13 - 2 * Qh), which gives Qh = 4. Substituting this back into the equation for Qw, we get Qw = 5. Therefore, the consumer will maximize their total utility by consuming 5 bottles of water and 4 hamburgers.

-Given the Data in the Above Table, Income of $13