Use the following to answer question:
-(Table: Utility from Burgers and Milkshakes)Use Table: Utility from Burgers and Milkshakes.David's marginal utilities for milkshakes and burgers are given in the table.The price of milkshakes is $2,and the price of burgers is $5.If David's income is $22,to maximize his utility,he buys _____ shake(s)and _____ burger(s).
A)1;1
B)6;0
C)5;1
D)6;2

Question

Use the following to answer question: 
-(Table: Utility from Burgers and Milkshakes)Use Table: Utility from Burgers and Milkshakes.David's marginal utilities for milkshakes and burgers are given in the table.The price of milkshakes is $2,and the price of burgers is $5.If David's income is $22,to maximize his utility,he buys _____ shake(s)and _____ burger(s).
A)1;1 
B)6;0 
C)5;1 
D)6;2

Quizplus · Accepted Answer

To maximize utility given the prices and income, David should allocate his entire budget towards the two goods until the marginal utility per dollar spent is equal for both. As shown in the table, this occurs when he buys 6 milkshakes and 2 burgers, which exhausts his budget. Therefore, the answer is D.

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