If the price of one can of Alpo is $0.50 and the price of each McBurger is $1, which of the following would Ms. Tightwad, a utility-maximizing consumer, buy with her $4? $$\begin{array} { c }
\text { Alpo } \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { McBurgers }\
\begin{array} { | c | c | c | c | }
\hline \begin{array} { c }
\text { Cans } \
\text { Consumed } \
\text { per Day }
\end{array} & \begin{array} { c }
\text { Total utility (Units } \
\text { uf utility) }
\end{array} & \begin{array} { c }
\text { McBur gers Consumed } \
\text { per Day }
\end{array} & \begin{array} { c }
\text { Total utility (Units } \
\text { d utility) }
\end{array} \
\hline 0 & 0 & 0 & 0 \
\hline 1 & 7 & 1 & 16 \
\hline 2 & 13 & 2 & 28 \
\hline 3 & 16 & 3 & 36 \
\hline 4 & 17 & 4 & 40 \
\hline
\end{array}\end{array}$$
A)4 McBurgers
B)3 McBurgers and 2 cans of Alpo
C)2 McBurgers and 4 cans of Alpo
D)1 McBurger and 6 cans of Alpo

Question

If the price of one can of Alpo is $0.50 and the price of each McBurger is $1, which of the following would Ms. Tightwad, a utility-maximizing consumer, buy with her $4? $$\begin{array} { c } 
\text { Alpo }  \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { McBurgers }\
\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Cans } \
\text { Consumed } \
\text { per Day }
\end{array} & \begin{array} { c } 
\text { Total utility (Units } \
\text { uf utility) }
\end{array} & \begin{array} { c } 
\text { McBur gers Consumed } \
\text { per Day }
\end{array} & \begin{array} { c } 
\text { Total utility (Units } \
\text { d utility) }
\end{array} \
\hline 0 & 0 & 0 & 0 \
\hline 1 & 7 & 1 & 16 \
\hline 2 & 13 & 2 & 28 \
\hline 3 & 16 & 3 & 36 \
\hline 4 & 17 & 4 & 40 \
\hline
\end{array}\end{array}$$
A)4 McBurgers
B)3 McBurgers and 2 cans of Alpo
C)2 McBurgers and 4 cans of Alpo
D)1 McBurger and 6 cans of Alpo

Quizplus · Accepted Answer

Ms. Tightwad should choose the combination that maximizes her total utility within her budget. Option B (3 McBurgers and 2 cans of Alpo) gives her a total utility of 28 (McBurgers) + 13 (Alpo) = 41, which is the highest possible utility she can achieve with $4.

If the Price of One Can of Alpo Is $0