Dane consumes both hamburgers and pizza.Suppose the formula for his indifference curves is H = U - 2 P,where H stands for the number of hamburgers,P stands for the number of pizzas,and U represents utility.Which of the following statements is true?
A) Dane prefers a consumption bundle with 5 hamburgers and 4 pizzas to a consumption bundle with 10 hamburgers and 2 pizzas.
B) Dane prefers a consumption bundle with 8 hamburgers and 3 pizza to a consumption bundle with 14 hamburgers and 1 pizzas.
C) Dane is indifferent between a consumption bundle with 10 hamburgers and 2 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas.
D) Dane is indifferent between a consumption bundle with 5 hamburgers and 4 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas.

Question

Quizplus · Accepted Answer

To compare the bundles, we need to compare their corresponding levels of utility. 
For option A, the utility is 5 - 2(4) = -3. 
For option B, the utility is 8 - 2(3) = 2. 
For option C, the utility is 10 - 2(2) = 6 and the utility for 8 - 2(3) = 2, so Dan is indifferent between them. 
For option D, the utility is 5 - 2(4) = -3 and the utility for 8 - 2(3) = 2, so Dan prefers the bundle with more utility, option B, over option D.

Dane Consumes Both Hamburgers and Pizza