Use the following to answer questions:
Figure: Water and Electricity
-(Figure: Water and Electricity) Refer to the figure. Using the solid budget constraint in this diagram, how much electricity and water per hour does this individual consume?
A) 2 MJ and 9 gallons
B) 4 MJ and 6 gallons
C) 6 MJ and 3 gallons
D) 7 MJ and 5 gallons

Question

Use the following to answer questions:
Figure: Water and Electricity 
-(Figure: Water and Electricity) Refer to the figure. Using the solid budget constraint in this diagram, how much electricity and water per hour does this individual consume?
A) 2 MJ and 9 gallons 
B) 4 MJ and 6 gallons 
C) 6 MJ and 3 gallons 
D) 7 MJ and 5 gallons

Quizplus · Accepted Answer

The individual consumes at the point where the budget constraint is tangent to the highest possible indifference curve. This point is at 4 MJ of electricity and 6 gallons of water per hour, which corresponds to point C on the graph.

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