Table 6.3
-Refer to Table 6.3.The table above shows Lee's marginal utility per dollar from consuming ice cream cones and cans of Lemonade.The price of an ice cream cone is $2 and the price of Lemonade is $1.Use this information to select the correct statement.
A)We cannot determine how many ice cream cones and cans of Lemonade Lee will consume without knowing what his income is.
B)To maximise his utility, Lee should consume 1 ice cream cone and 5 cans of Lemonade.
C)We cannot determine how many ice cream cones and cans of Lemonade will maximise Lee's utility because we are given only the marginal utility per dollar values.We also need to know the marginal utility for each quantity.
D)If Lee has an unlimited budget, he will maximise his utility by buying only Lemonade.

Question

Table 6.3 
-Refer to Table 6.3.The table above shows Lee's marginal utility per dollar from consuming ice cream cones and cans of Lemonade.The price of an ice cream cone is $2 and the price of Lemonade is $1.Use this information to select the correct statement.
A)We cannot determine how many ice cream cones and cans of Lemonade Lee will consume without knowing what his income is. 
B)To maximise his utility, Lee should consume 1 ice cream cone and 5 cans of Lemonade. 
C)We cannot determine how many ice cream cones and cans of Lemonade will maximise Lee's utility because we are given only the marginal utility per dollar values.We also need to know the marginal utility for each quantity. 
D)If Lee has an unlimited budget, he will maximise his utility by buying only Lemonade.

Quizplus · Accepted Answer

CWithout knowing Lee's income, it's impossible to determine the exact combination of ice cream cones and cans of Lemonade he will consume to maximize his utility. Additionally, knowing only the marginal utility per dollar isn't enough to determine the optimal consumption quantities; we also need to know the marginal utility for each specific quantity of goods consumed to make accurate predictions.

Table 6.3 -Refer to Table 6.3.The Table Above Shows Lee's Marginal Utility