Your professor has $20 to spend on Sour Patch Kids and Cherry Coke Zero, the two supplies most useful in the production of economics papers. Cherry Coke Zero costs $1.50. Sour Patch Kids cost $2.50. The professor gets utility from the goods as follows: Quantity of Cherry Total Utility Marginal Utility of Marginal Utility per Quantity of Sour Total Marginal Marginal Utility Utility of Utility per Coke from Cherry Dollar for Patch from Sour Sour Dollar for Zero Cherry Coke Cherry Kids Patch Patch Sour Coke Zero Coke Kids Kids Patch Zero Zero Kids 0 0 X X 0 0 X X 1 15 1 35 2 27 2 62.5 3 36 3 82.5 4 42 4 95 5 45 5 100 6 45 6 97.5 (Some columns were left empty. You may, but are not required to, fill them in if you will find it helpful to do so.) a) Write the professor's budget constraint. b) Sketch the professor's budget constraint. c) What is the opportunity cost of one Cherry Coke Zero?

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Chapter1: Making Economics Decisions
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Your professor has $20 to spend on Sour Patch Kids and Cherry Coke Zero, the two supplies most
useful in the production of economics papers. Cherry Coke Zero costs $1.50. Sour Patch Kids cost
$2.50.
The professor gets utility from the goods as follows:
Quantity
of Cherry
Total
Utility
Marginal
Utility of
Marginal
Utility per
Coke
from
Cherry
Dollar for
Quantity
of Sour
Patch
Total
Marginal
Marginal
Utility
Utility of
Utility per
from Sour
Sour
Dollar for
Zero
Cherry
Coke
Cherry
Kids
Patch
Patch
Sour
Coke
Zero
Coke
Kids
Kids
Patch
Zero
Zero
Kids
0
0
X
0
0
X
X
1
15
1
35
2
27
2
62.5
3
36
3
82.5
4
42
4
95
5
45
5
100
6
45
6
97.5
(Some columns were left empty. You may, but are not required to, fill them in if you will find it
helpful to do so.)
a) Write the professor's budget constraint.
b) Sketch the professor's budget constraint.
c) What is the opportunity cost of one Cherry Coke Zero?
d) What is the opportunity cost of one unit of Sour Patch Kids?
e) What is the professor's optimal consumption bundle? Explain fully how you found the
optimal bundle.
Transcribed Image Text:Your professor has $20 to spend on Sour Patch Kids and Cherry Coke Zero, the two supplies most useful in the production of economics papers. Cherry Coke Zero costs $1.50. Sour Patch Kids cost $2.50. The professor gets utility from the goods as follows: Quantity of Cherry Total Utility Marginal Utility of Marginal Utility per Coke from Cherry Dollar for Quantity of Sour Patch Total Marginal Marginal Utility Utility of Utility per from Sour Sour Dollar for Zero Cherry Coke Cherry Kids Patch Patch Sour Coke Zero Coke Kids Kids Patch Zero Zero Kids 0 0 X 0 0 X X 1 15 1 35 2 27 2 62.5 3 36 3 82.5 4 42 4 95 5 45 5 100 6 45 6 97.5 (Some columns were left empty. You may, but are not required to, fill them in if you will find it helpful to do so.) a) Write the professor's budget constraint. b) Sketch the professor's budget constraint. c) What is the opportunity cost of one Cherry Coke Zero? d) What is the opportunity cost of one unit of Sour Patch Kids? e) What is the professor's optimal consumption bundle? Explain fully how you found the optimal bundle.
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