(Figure: Utility Table I) in the Table, Assume That a Consumer

question 61

Multiple Choice

(Figure: Utility Table I) In the table, assume that a consumer has a budget of $6, pizza costs $3 per slice, and soda costs $2 per can. Utility will be maximized by buying:
$\begin{array}{l}\quad\quad\quad\quad\quad\text { Pizza } \quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Soda }\\\begin{array}{|c|c|}\hline \text { Quantity } & \text { Total Utility } \\\hline 0 & 0 \\\hline 1 & 72 \\\hline 2 & 108 \\\hline 3 & 126 \\\hline 4 & 137 \\\hline 5 & 144 \\\hline\end{array}\begin{array}{c|c|}\hline \text { Quantity } & \text { Total Utility } \\\hline 0 & 0 \\\hline 1 & 48 \\\hline 2 & 84 \\\hline 3 & 108 \\\hline 4 & 120 \\\hline 5 & 127 \\\hline\end{array}\end{array}$

• A) no slices of pizza and 3 cans of soda.
• B) 1 slice of pizza and 1 can of soda.
• C) 2 slices of pizza and no cans of soda.
• D) 1 slice of pizza and 2 cans of soda.

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Definitions:

Marginal Product

The increase in output that arises from an additional unit of input, holding all other inputs constant.

Total Cost Curve

A graphic representation showing how total cost changes with changes in the level of output or production.

Output

The amount of goods or services produced by a company, industry, or economy in a given period.

Isoquant

A curve representing all the combinations of inputs that result in the production of a certain level of output, used in the study of production theory.