Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | }
\hline \begin{array} { c }
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c }
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c }
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c }
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c }
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 46 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ Refer to Table 19.3.If Michael has $28 dollars to spend,why will three colas and four pretzels not be optimal?
A)This combination has less total utility.
B)This combination is affordable but does not maximize utility.
C)This combination is not affordable.
D)This combination has less marginal utility per dollar.

Question

Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c } 
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 46 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ Refer to Table 19.3.If Michael has $28 dollars to spend,why will three colas and four pretzels not be optimal?
A)This combination has less total utility.
B)This combination is affordable but does not maximize utility.
C)This combination is not affordable.
D)This combination has less marginal utility per dollar.

Quizplus · Accepted Answer

DThis combination is not affordable because three colas at $8 each would cost $24, and four pretzels at $4 each would cost $16, totaling $40, which exceeds Michael's $28 budget. Additionally, the combination has less marginal utility per dollar, indicating it's not the most efficient use of his funds in terms of maximizing utility.

Assume the Price of Cola Is $8 Per Unit and the Price