Table 10-3

-Refer to Table 10-3. The table above shows Lee's marginal utility from consuming ice cream cones and cans of Lime Fizz Soda. Select the phrase that completes the following statement. "We can determine the number of ice cream cones and cans of Lime Fizz Soda Lee should consume to maximize his utility
A) if we know what Lee's income is."
B) if we know what Lee's income is and the price of an ice cream cone and the price of a can Lime Fizz Soda."
C) by adding up the marginal utilities for ice cream cones and Lime Fizz Soda."
D) if we know the values of the marginal utility per dollar for ice cream cones and Lime Fizz Soda."

Question

Table 10-3
 
-Refer to Table 10-3. The table above shows Lee's marginal utility from consuming ice cream cones and cans of Lime Fizz Soda. Select the phrase that completes the following statement. "We can determine the number of ice cream cones and cans of Lime Fizz Soda Lee should consume to maximize his utility
A) if we know what Lee's income is." 
B) if we know what Lee's income is and the price of an ice cream cone and the price of a can Lime Fizz Soda." 
C) by adding up the marginal utilities for ice cream cones and Lime Fizz Soda." 
D) if we know the values of the marginal utility per dollar for ice cream cones and Lime Fizz Soda."

Quizplus · Accepted Answer

To maximize utility, Lee needs to allocate his income such that the marginal utility per dollar spent is equal across all goods. Therefore, knowing his income and the prices of the goods is necessary.

Table 10-3 -Refer to Table 10-3. the Table Above Shows Lee's Marginal