-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?
A) 3 pens and 6 pencils
B) 4 pens and 5 pencils
C) 5 pens and 4 pencils
D) 6 pens and 3 pencils

Question

-The table above gives the utility from pens and pencils. If pens and pencils both cost $.25 each and the consumer has an income of $2.25, which of the following combinations maximizes the consumer's utility?
A) 3 pens and 6 pencils 
B) 4 pens and 5 pencils 
C) 5 pens and 4 pencils 
D) 6 pens and 3 pencils

Quizplus · Accepted Answer

The consumer has an income of $2.25 and pens and pencils both cost $.25 each. So, the consumer can buy 9 pens or 9 pencils. The utility from 5 pens and 4 pencils is 20, which is the highest utility that the consumer can achieve with their budget.

-The Table Above Gives the Utility from Pens and Pencils