If the Price of One Can of Alpo Is $0

question 137

Multiple Choice

If the price of one can of Alpo is $0.50 and the price of each McBurger is $1, which of the following would Ms. Tightwad, a utility-maximizing consumer, buy with her $4? $$\begin{array} { c } \text { Alpo } \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { McBurgers }\\\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Cans } \\\text { Consumed } \\\text { per Day }\end{array} & \begin{array} { c } \text { Total utility (Units } \\\text { uf utility) }\end{array} & \begin{array} { c } \text { McBur gers Consumed } \\\text { per Day }\end{array} & \begin{array} { c } \text { Total utility (Units } \\\text { d utility) }\end{array} \\\hline 0 & 0 & 0 & 0 \\\hline 1 & 7 & 1 & 16 \\\hline 2 & 13 & 2 & 28 \\\hline 3 & 16 & 3 & 36 \\\hline 4 & 17 & 4 & 40 \\\hline\end{array}\end{array}$$

• A)4 McBurgers
• B)3 McBurgers and 2 cans of Alpo
• C)2 McBurgers and 4 cans of Alpo
• D)1 McBurger and 6 cans of Alpo

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Definitions:

Period

A length of time during which a series of events or an action takes place or is completed.

Total Percentage Return

The total return on an investment, expressed as a percentage, accounting for all forms of earnings including dividends, interest, and capital gains.

Quarterly Dividends

Dividends paid by a corporation to its shareholders every quarter of the fiscal year.

Shares

Units of ownership interest in a corporation or financial asset, providing a share in the company's profits and losses.