-Chase has a budget of $14 which he must allocate between steak and cranberry juice.The table gives his marginal utility and the marginal utility per dollar for both of those goods.The price of steak is $10 per serving and the price of cranberry juice is $2 per serving.To maximize his utility,Chase should buy
A) 2 servings of steak and 2 servings of cranberry juice.
B) 2 servings of steak and 4 servings of cranberry juice.
C) 1 serving of steak because this has the highest marginal utility.
D) 1 serving of steak and 2 servings of cranberry juice.
E) 4 servings of steak and 4 servings of cranberry juice.

Question

-Chase has a budget of $14 which he must allocate between steak and cranberry juice.The table gives his marginal utility and the marginal utility per dollar for both of those goods.The price of steak is $10 per serving and the price of cranberry juice is $2 per serving.To maximize his utility,Chase should buy
A) 2 servings of steak and 2 servings of cranberry juice. 
B) 2 servings of steak and 4 servings of cranberry juice. 
C) 1 serving of steak because this has the highest marginal utility. 
D) 1 serving of steak and 2 servings of cranberry juice. 
E) 4 servings of steak and 4 servings of cranberry juice.

Quizplus · Accepted Answer

To maximize utility, Chase should equate the marginal utility per dollar across the goods he can afford within his budget. Given the prices, he cannot afford options that exceed his $14 budget. Buying 1 serving of steak ($10) and 2 servings of cranberry juice ($4) utilizes his entire budget efficiently, aligning with the principle of maximizing utility by equating the marginal utility per dollar spent across goods.

-Chase Has a Budget of $14 Which He Must Allocate