-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. If Jane's total budget for magazines and CDs is $70.00 per week, what is her total utility at her utility maximizing consumer equilibrium?
A) 2480 units
B) 1870 units
C) 210 units
D) 30 units

Question

-The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. If Jane's total budget for magazines and CDs is $70.00 per week, what is her total utility at her utility maximizing consumer equilibrium?
A) 2480 units 
B) 1870 units 
C) 210 units 
D) 30 units

Quizplus · Accepted Answer

To maximize utility, Jane should allocate her budget such that the marginal utility per dollar spent on magazines equals the marginal utility per dollar spent on CDs. By calculating the marginal utility per dollar for each option and ensuring the total cost does not exceed $70, the maximum total utility is 2480 units.

-The Table Above Gives Jane's Total Utility from Magazines and CDs