Joe Is Maximizing Utility by Consuming Three Colas at $2

question 58

Multiple Choice

Joe is maximizing utility by consuming three colas at $2 apiece and four hot dogs. The last cola gave him 200 units of utility, and the last hot dog gave him 300 units of utility. The price of each hot dog is:

• A) $3.00.
• B) $1.50.
• C) $1.00.
• D) $0.50.

Understand the financial benefits of home ownership.

Recognize the importance of establishing investment objectives for pension funds.

Understand the characteristics and purpose of target-date retirement funds.

Understand the roles and responsibilities of professional financial planners.

---

Definitions:

Breach of Contract

The violation of any term or condition of a binding legal agreement, which may result in legal action for remedy.

Illusory Promise

A statement that appears to commit to an action but does not actually bind the party to any obligation.

Promissory Estoppel

A legal principle that prohibits a party from going back on a promise made to another party, if the latter has reasonably relied on that promise to their detriment.

Option Contract

A contract granting one party the option to execute a transaction, such as buying or selling an asset at a future date.