The table given below reports the total utility derived by an individual from the consumption of different units of goods A,B,andC. Table 6.4

- Refer to Table 6.4.What is the highest possible total utility a consumer can attain given an income of $10?
A)554
B)705
C)706
D)717
E)899

Question

The table given below reports the total utility derived by an individual from the consumption of different units of goods A,B,andC. Table 6.4

- Refer to Table 6.4.What is the highest possible total utility a consumer can attain given an income of $10?
A)554 
B)705 
C)706 
D)717 
E)899

Quizplus · Accepted Answer

To determine the best choice, we need to calculate the marginal utility per dollar for each good. For A, the marginal utility per dollar is highest at 6 units, where it is 57. For B, the marginal utility per dollar is highest at 5 units, where it is 100. For C, the marginal utility per dollar is highest at 4 units, where it is 120.

Therefore, the consumer should consume 6 units of good A, 5 units of good B, and 4 units of good C, which gives a total utility of 717, the highest possible total utility.

The Table Given Below Reports the Total Utility Derived by an Individual