Use the following to answer question 175:
-(Table: Marginal Utility per Dollar IV)Use Table: Marginal Utility per Dollar IV.If Ashyra has $40 to spend on potatoes and clams,then the utility-maximizing combination is _____ kilogram(s)of clams and _____ kilogram(s)of potatoes.
A) 3;4
B) 2;5
C) 1;8
D) 2;6

Question

Use the following to answer question 175: 
-(Table: Marginal Utility per Dollar IV)Use Table: Marginal Utility per Dollar IV.If Ashyra has $40 to spend on potatoes and clams,then the utility-maximizing combination is _____ kilogram(s)of clams and _____ kilogram(s)of potatoes.
A) 3;4 
B) 2;5 
C) 1;8 
D) 2;6

Quizplus · Accepted Answer

To find the utility-maximizing combination, we need to look for the point where the marginal utility per dollar for potatoes equals the marginal utility per dollar for clams. From the table, we see that at 2 kg of clams, the MUpD for clams is 10 and for potatoes is 4, so the ratio is 10/4= 2.5. We can see that the only option with a ratio close to 2.5 is D, with 2 kg of clams and 6 kg of potatoes. At this combination, the MUpD for clams is 8 and for potatoes is 3, so the ratio is 8/3= 2.67, which is close enough to 2.5. Therefore, D is the utility-maximizing combination.

Use the Following to Answer Question 175