Jose consumes rare books which cost him 8 pesos each and pieces of antique furniture which cost him 10 pesos each.He spends his entire income to buy 9 rare books and 11 pieces of antique furniture.Nigel has the same preferences as Jose, but faces different prices and has a different income.Nigel has an income of 162 pounds.He buys rare books at a cost of 4 pounds each and pieces of antique furniture at a cost of 11 pounds each.
A)Nigel would prefer Jose's bundle to his own.
B)Jose would prefer Nigel's bundle to his own.
C)Neither would prefer the other's bundle to his own.
D)Each prefers the other's bundle to his own.
E)We can't tell whether either would prefer the other's bundle without knowing what quantities Nigel consumes.

Question

Quizplus · Accepted Answer

Let's first find Jose's bundle's cost: 
9 rare books cost = 9 x 8 = 72 pesos 
11 antique furniture pieces cost = 11 x 10 = 110 pesos 
Total cost = 182 pesos

Now let's find Nigel's bundle's cost: 
He buys 1 rare book at 4 pounds each, so 9 rare books cost = 9 x 4 = 36 pounds 
He buys 1 antique furniture piece at 11 pounds each, so 11 antique furniture pieces cost = 11 x 11 = 121 pounds 
Total cost = 157 pounds

Since Nigel's income is 162 pounds, he can afford his bundle, but he would have 5 pounds left over. 
On the other hand, Jose can afford his bundle since we don't know his income, but he would have no money left.

Now let's consider their preferences. 
Nigel's preferences are the same as Jose's, but his bundle is cheaper. Therefore, Jose would prefer Nigel's bundle to his own since he would still be able to buy something with his remaining money.

Therefore, the answer is B.

Jose Consumes Rare Books Which Cost Him 8 Pesos Each