Table 8.2

Table 8.2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 8.2.If Keira maximizes her utility, how many units of each good should she buy?

Question

Table 8.2
  
Table 8.2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 8.2.If Keira maximizes her utility, how many units of each good should she buy?

Quizplus · Accepted Answer

To maximize utility, Keira should purchase the combination of goods where the marginal utility per dollar spent is equal for both goods. This typically involves comparing the marginal utility of each good relative to its price and choosing the combination that equalizes these ratios across goods.

Table 8.2 Table 8.2 Above Shows Keira's Utility from Soup and Sandwiches