Use the following information to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following table. Number of Items Marginal Utility of Chocolates 1 60 2 50 40 30 20 3 4 5 6 7 8 10 Multiple Choice 5 0 6 chocolates and 2 hard candles 4 chocolates and 3 hard candles O 2 chocolates and 4 hard candles Marginal Utility of Hard Candles O chocolates and 5 hard candles 187288288 150 140 100 Which combination would maximize Cloe's total utility given her $4 budget? 80 70 50 20
Use the following information to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following table. Number of Items Marginal Utility of Chocolates 1 60 2 50 40 30 20 3 4 5 6 7 8 10 Multiple Choice 5 0 6 chocolates and 2 hard candles 4 chocolates and 3 hard candles O 2 chocolates and 4 hard candles Marginal Utility of Hard Candles O chocolates and 5 hard candles 187288288 150 140 100 Which combination would maximize Cloe's total utility given her $4 budget? 80 70 50 20
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
100%
Which combination would maximize Cloe’s total utility given her $4 budget?
Multiple Choice
6 chocolates and 2 hard candies
4 chocolates and 3 hard candies
2 chocolates and 4 hard candies
0 chocolates and 5 hard candies
Transcribed Image Text:Use the following information to answer the question below. Cloe is given $4 of pocket money to be spent on
either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The
marginal utilities derived from the consumption of each product are as shown in the following table.
Number of Items Marginal Utility of Chocolates
1
60
2
50
40
30
20
3
4
5
6
7
8
10
Multiple Choice
5
0
6 chocolates and 2 hard candles
4 chocolates and 3 hard candles
O 2 chocolates and 4 hard candles
Marginal Utility of Hard Candles
O chocolates and 5 hard candles
187288288
150
140
100
Which combination would maximize Cloe's total utility given her $4 budget?
80
70
50
20
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Follow-up Question
Use the following information to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents each and hard candies cost 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following table.
|
Number of Items |
|
Marginal Utility of Hard Candies |
|
1 |
60 |
150 |
|
2 |
50 |
140 |
|
3 |
40 |
120 |
|
4 |
30 |
100 |
|
5 |
20 |
80 |
|
6 |
10 |
70 |
|
7 |
5 |
50 |
|
8 |
0 |
20 |
What is Cloe’s total utility at her utility maximizing bundle?
Multiple Choice
-
870 utils
-
620 utils
-
80 utils
-
150 utils
Solution
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