Figure 21-20
The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies:
-Refer to Figure 21-20. Assume that the consumer has an income of $40. If the price of chocolate chips is $4 and the price of marshmallows is $4, the optimizing consumer would choose to purchase
A)9 marshmallows and 6 chocolate chips.
B)10 marshmallows and 10 chocolate chips.
C)5 marshmallows and 5 chocolate chips.
D)3 marshmallows and 9 chocolate chips.

Question

Figure 21-20
The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: 
-Refer to Figure 21-20. Assume that the consumer has an income of $40. If the price of chocolate chips is $4 and the price of marshmallows is $4, the optimizing consumer would choose to purchase
A)9 marshmallows and 6 chocolate chips. 
B)10 marshmallows and 10 chocolate chips. 
C)5 marshmallows and 5 chocolate chips. 
D)3 marshmallows and 9 chocolate chips.

Quizplus · Accepted Answer

At $4 per unit for marshmallows and chocolate chips, the budget constraint line intersects the indifference curve at point C, where the consumer purchases 5 marshmallows and 5 chocolate chips. This point maximizes the consumer's utility given their budget constraint.

Figure 21-20 The Following Graph Illustrates a Representative Consumer's Preferences for Marshmallows