Figure 21-11
-Refer to Figure 21-11.Assume that the consumer depicted in the figure has an income of $40,the price of a bag of marshmallows is $2,and the price of a bag of chocolate chips is $2.The optimizing consumer will choose to purchase which bundle of marshmallows and chocolate chips?
A) A
B) B
C) C
D) D

Question

Figure 21-11 
-Refer to Figure 21-11.Assume that the consumer depicted in the figure has an income of $40,the price of a bag of marshmallows is $2,and the price of a bag of chocolate chips is $2.The optimizing consumer will choose to purchase which bundle of marshmallows and chocolate chips?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

The consumer's budget allows for 20 bags in total (since $40/$2 per bag = 20 bags). The optimizing consumer will choose the bundle that maximizes utility while staying within the budget constraint. Bundle C is likely the optimal choice as it is on the budget line and provides the highest utility.

Figure 21-11 -Refer to Figure 21-11.Assume That the Consumer Depicted in the Depicted