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

question 59

Multiple Choice

(Figure: Utility Table I) In the table, assume that a consumer has a budget of $18, pizza costs $4 per slice, and soda costs $3 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) 4 slices of pizza and 1 can of soda.
• B) 3 slices of pizza and 2 cans of soda.
• C) 2 slices of pizza and 3 cans of soda.
• D) 1 slice of pizza and 4 cans of soda.

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian investment vehicle for individuals to save for retirement on a tax-sheltered basis.

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, applied once per year.

Ordinary General Annuity

An annuity in which payments are made at the end of each period, such as a year, month, or quarter.

Future Value

The value of an investment at a specific date in the future, considering factors such as interest rates and compounding.