Table 10-2 Table 10-2 Above Shows Keira's Utility from Soup and Sandwiches

question 252

Multiple Choice

Table 10-2

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2.Suppose Keira's income increases from $18 to $23 but prices have not changed.What is her utility maximizing bundle now?

• A)6 cups of soup and 5 sandwiches
• B)4 cups of soup and 5 sandwiches
• C)5 cups of soup and 4 sandwiches
• D)5 cups of soup and 5 sandwiches

---

Definitions:

Unrecoverable Costs

Expenses that have been paid and cannot be recovered, often referred to as sunk costs, which should not factor into future spending decisions.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, or loan repayments.

Variable Costs

Expenses that vary directly with the amount of production output of a company.

Purely Competitive Industry

Characterized by many firms selling identical products, where no single firm can influence the market price, ensuring competition based on price.