-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 and Jane's budget is $88. What is Jane's total utility when she maximizes her utility?
A) 70 units
B) 1516 units
C) 2536 units
D) 2586 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 and Jane's budget is $88. What is Jane's total utility when she maximizes her utility?
A) 70 units 
B) 1516 units 
C) 2536 units 
D) 2586 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 and comparing these values, Jane can determine the optimal combination of magazines and CDs to purchase within her $88 budget, resulting in a total utility of 2586 units.

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