(Table) A consumer has $30 to spend on movies or books. Based on the table, the consumer has maximized his utility at which combination of goods?
$\begin{array}{|c|c|c|c|}
\hline \text { Movies } & \text { \$6 } & \text { Books } & \text { \$3 } \
\hline Q & \text { MU } & \boldsymbol{Q} & \text { MU } \
\hline 0 & - & 0 & - \
\hline 1 & 55 & 1 & 24 \
\hline 2 & 38 & 2 & 23 \
\hline 3 & 32 & 3 & 22 \
\hline 4 & 25 & 4 & 21 \
\hline 5 & 20 & 5 & 20 \
\hline 6 & 15 & 6 & 19 \
\hline 7 & 12 & 7 & 18 \
\hline 8 & 10 & 8 & 17 \
\hline
\end{array}$
A) one movie; eight books
B) two movies; six books
C) three movies; four books
D) four movies; two books

Question

Quizplus · Accepted Answer

To maximize utility, the consumer should allocate their budget in a way that the marginal utility per dollar spent is equal across goods. For movies ($6 each) and books ($3 each), the combination of two movies (MU = 38 for the second movie, 38/6 ≈ 6.33 MU per dollar) and six books (MU = 19 for the sixth book, 19/3 ≈ 6.33 MU per dollar) achieves this balance, spending exactly $30 (2 movies * $6 + 6 books * $3 = $12 + $18 = $30).

(Table) a Consumer Has $30 to Spend on Movies or Books