Refer to the following table to answer the following questions:

-Assume that chips cost $1 and soda costs $2.If the consumer has $14,the combination of goods that would maximize his utility per dollar leads to a utility equal to ________ utils.
A) 72
B) 84
C) 77
D) 9
E) 99

Question

Refer to the following table to answer the following questions:
 
-Assume that chips cost $1 and soda costs $2.If the consumer has $14,the combination of goods that would maximize his utility per dollar leads to a utility equal to ________ utils.
A) 72 
B) 84 
C) 77 
D) 9 
E) 99

Quizplus · Accepted Answer

To maximize utility per dollar, the consumer should allocate their budget in a way that equalizes the marginal utility per dollar spent on chips and soda. Without specific information on the utility gained from each chip or soda, a common approach is to assume that the utility gained is proportional to the amount spent. Given that chips are cheaper, buying more chips could potentially offer more utility per dollar if the utility function is linear or if the diminishing marginal utility is not a factor. With $14, buying 14 chips would give the maximum number of units, assuming each chip provides a utility greater than or equal to the utility provided by a soda per dollar. However, without specific utility values for chips and soda, we cannot calculate the exact combination based on utility maximization principles. The correct answer, therefore, is based on the information provided or assumed in the question. Since no specific utility values or functions are given, the answer provided (E) 99, suggests a specific utility value that cannot be directly derived from the information given, indicating it might be based on additional assumptions or information not provided in the question.

Refer to the Following Table to Answer the Following Questions