Stewie enjoys watching DVDs and listening to his iPod.Suppose his utility function is given by U(D,I)= 3D + 4(D × I),where D is the number of hours he spends watching DVDs and I is the number of hours he spends listening to his iPod.Which of the following combinations will provide Stewie with the greatest amount of satisfaction?
A) 4 hours of watching DVDs and 8 hours of listening to his iPod
B) 6 hours of watching DVDs and 6 hours of listening to his iPod
C) 2 hours of watching DVDs and 10 hours of listening to his iPod
D) 8 hours of watching DVDs and 6 hours of listening to his iPod

Question

Quizplus · Accepted Answer

Using the utility function U(D,I) = 3D + 4(D × I) and substituting the given hours for D and I in each option, we find the utility for each option as follows:A) U(4,8) = 3(4) + 4(4×8) = 12 + 128 = 140B) U(6,6) = 3(6) + 4(6×6) = 18 + 144 = 162C) U(2,10) = 3(2) + 4(2×10) = 6 + 80 = 86D) U(8,6) = 3(8) + 4(8×6) = 24 + 192 = 216Option D provides the greatest amount of satisfaction with a utility of 216.

Stewie Enjoys Watching DVDs and Listening to His IPod