Jane Spends $210 Per Month on Wine and Beer

question 22

Multiple Choice

Jane spends $210 per month on wine and beer.Her utility function is given by TU = 100WB,where W represents the number of bottles of wine that she buys and B represents the number of cases of beer that she buys.If wine costs $10 per bottle and beer costs $15 per case,she will maximize utility by buying:

• A) 10.5 bottles of wine and 7 cases of beer.
• B) 2 bottles of wine and 3 cases of beer.
• C) equal amounts of wine and beer.
• D) 10 bottles of wine and 13.33 cases of beer.
• E) none of the above.

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Definitions:

Potential Substitutes

Products or services that serve as alternatives to an existing product, potentially satisfying the same need or demand in the market.

Brand-Switching Data

Involves information and analysis on why consumers switch from one brand to another, providing insights into consumer behavior and preferences.

Fair Value Zone

An assessment area within which the price of an asset is considered to reflect its true market value.

Value Map

A tool used to compare the value delivered by different products or services in the marketplace from the perspective of the customer.