-The Table Above Gives the Utility from Pens and Pencils

question 192

Multiple Choice

-The table above gives the utility from pens and pencils. If the consumer has an income of $4, pens cost $1, and pencils cost $.20, which of the following combinations maximizes the consumer's utility?

• A) 4 pens and 0 pencils
• B) 3 pens and 5 pencils
• C) 3 pens and 6 pencils
• D) no combination shown

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Definitions:

Probability

The quantification of how likely an event is to happen, measured on a scale from 0 to 1.

Market Size

An estimate of the total demand for a product or service within a particular market.

R&D Costs

Expenses associated with the research and development activities of a company, typically aimed at developing new products or technologies.

Triangular Distribution

A probability distribution shaped like a triangle, which is used to model variables that have known minimum and maximum values and where the mode can be estimated.