-Given the data in the above table, if income is $16, and the price is $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 5 hamburgers
B) 4 bottles of water and 6 hamburgers
C) 6 bottles of water and 5 hamburgers
D) 6 bottles of water and 6 hamburgers

Question

-Given the data in the above table, if income is $16, and the price is $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 5 hamburgers 
B) 4 bottles of water and 6 hamburgers 
C) 6 bottles of water and 5 hamburgers 
D) 6 bottles of water and 6 hamburgers

Quizplus · Accepted Answer

The consumer's total utility is maximized when the marginal utility per dollar spent on each good is equal. In this case, the marginal utility per dollar spent on water is 10 utils/dollar, and the marginal utility per dollar spent on hamburgers is 5 utils/dollar. Therefore, the consumer should spend $10 on water and $6 on hamburgers. This will allow the consumer to purchase 6 bottles of water and 5 hamburgers, which will maximize their total utility.

-Given the Data in the Above Table, If Income Is