Refer to the following table to answer the following questions:

-If the purchase of 5 strawberries and 5 apples maximizes your utility per dollar,the price of strawberries must be ________ if the price of apples is $3.00.
A) $1.00
B) $2.00
C) $1.50
D) $2.50
E) $3.00

Question

Refer to the following table to answer the following questions:
 
-If the purchase of 5 strawberries and 5 apples maximizes your utility per dollar,the price of strawberries must be ________ if the price of apples is $3.00.
A) $1.00 
B) $2.00 
C) $1.50 
D) $2.50 
E) $3.00

Quizplus · Accepted Answer

To maximize utility per dollar, we need to find the combination of strawberries and apples that gives us the highest point on the total utility curve that falls on or below the budget constraint. From the table, we can see that the highest point on the total utility curve that falls on or below the budget constraint of $15 is the combination of 5 strawberries and 5 apples, which gives us a total utility of 32.5. If we know that the price of apples is $3.00, we can use the budget constraint equation to solve for the price of strawberries. Let x be the price of strawberries, then:
5x + 5(3) = 15
5x = 0
x = $1.50
Therefore, the price of strawberries must be $1.50 for the purchase of 5 strawberries and 5 apples to maximize utility per dollar.

Refer to the Following Table to Answer the Following Questions