Table 6.4
-Refer to Table 6.4.For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU)and marginal utility per dollar (MU/P)for Mabel Jarvis.Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches.Which of the following statements is true?
A)If Mabel maximises her utility, she will buy three steak and cheese sandwiches and two grilled chicken sandwiches.
B)If Mabel was maximising her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich.
C)Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches.
D)To maximise her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches.

Question

Table 6.4 
-Refer to Table 6.4.For steak and cheese and grilled chicken sandwiches, the table contains the values of the marginal utility (MU)and marginal utility per dollar (MU/P)for Mabel Jarvis.Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches.Which of the following statements is true?
A)If Mabel maximises her utility, she will buy three steak and cheese sandwiches and two grilled chicken sandwiches. 
B)If Mabel was maximising her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich. 
C)Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches. 
D)To maximise her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches.

Quizplus · Accepted Answer

By adding up the MU/P values for each sandwich, we can see that Mabel would receive the most marginal utility per dollar by purchasing two steak and cheese sandwiches and three grilled chicken sandwiches, spending a total of $12. If she were to receive an additional $4, she would still be able to purchase another grilled chicken sandwich, which has the highest MU/P value. Therefore, choice B is correct. Choices A, C, and D are all incorrect as they do not result in Mabel maximising her utility given her budget constraint.

Table 6.4 -Refer to Table 6.4.For Steak and Cheese and Grilled Chicken