Question

For lunch, Wendy eats only salads or fruit & yogurt smoothies. Her weekly food budget is $48. Each salad costs $6 and each smoothie costs $3. When deciding how much of each good to buy, Wendy knows that 2 salads and 4 smoothies will give her a utility of 8. What is Wendy’s utility-maximizing point?

a) 1 salad, 14 smoothies

b) 6 salads, 4 smoothies

c) 5 salads, 6 smoothies

d) 4 salads, 8 smoothies

Rick eats only French fries and burgers at his office cafeteria. His weekly lunch budget is $48. Each burger costs $6 and each order of fries costs $3. When deciding how much of each good to buy, Rick knows that 2 burgers and 4 orders of French fries will give him a utility of 8. At his utility-maximizing point, Rick's utility is:

a) 32

b) 48

c) 40

d) 24

Answer 1