Table 10-3

-Refer to Table 10-3.The table above shows Lee's marginal utility from consuming ice cream cones and cans of Lime Fizz Soda.Select the phrase that completes the following statement."We can determine the number of ice cream cones and cans of Lime Fizz Soda Lee should consume to maximize his utility
A)if we know what Lee's income is."
B)if we know what Lee's income is and the price of an ice cream cone and the price of a can of Lime Fizz Soda."
C)by adding up the marginal utilities for ice cream cones and Lime Fizz Soda."
D)if we know the values of the marginal utility per dollar for ice cream cones and Lime Fizz Soda."

Question

Table 10-3
 
-Refer to Table 10-3.The table above shows Lee's marginal utility from consuming ice cream cones and cans of Lime Fizz Soda.Select the phrase that completes the following statement."We can determine the number of ice cream cones and cans of Lime Fizz Soda Lee should consume to maximize his utility
A)if we know what Lee's income is." 
B)if we know what Lee's income is and the price of an ice cream cone and the price of a can of Lime Fizz Soda." 
C)by adding up the marginal utilities for ice cream cones and Lime Fizz Soda." 
D)if we know the values of the marginal utility per dollar for ice cream cones and Lime Fizz Soda."

Quizplus · Accepted Answer

If we know what Lee's income is and the price of an ice cream cone and the price of a can of Lime Fizz Soda, we can determine the number of ice cream cones and cans of Lime Fizz Soda Lee should consume to maximize his utility. This is because we can use the information to calculate Lee's budget line and then find the point on the budget line where Lee's marginal utility from consuming ice cream cones is equal to his marginal utility from consuming cans of Lime Fizz Soda.

Table 10-3 -Refer to Table 10-3.The Table Above Shows Lee's Marginal Utility