Jamie's Marginal Utility from Muffins and from Doughnuts (In Utils)is

question 96

Multiple Choice

Jamie's marginal utility from muffins and from doughnuts (in utils) is shown in the accompanying table. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1. $$\begin{array} { | c | r | r | r | } \hline \begin{array} { c } \text { Mufins } \\\text { Per Day }\end{array} & \begin{array} { c } \text { Marginnl Utility } \\\text { Per Muftin }\end{array} & \begin{array} { c } \text { Deughnuts } \\\text { Per Day }\end{array} & \begin{array} { c } \text { Marginal Utility } \\\text { Per Deughnut }\end{array} \\\hline 1 & 40 & 2 & 20 \\\hline 2 & 30 & 4 & 15 \\\hline 3 & 20 & 5 & 10 \\\hline\end{array}$$ What is Jamie's optimal combination of muffins and doughnuts each day?

• A)1 muffin, 6 doughnuts
• B)2 muffins, 4 doughnuts
• C)3 muffins, 2 doughnuts
• D)4 muffins, zero doughnuts

---

Definitions:

National Debt

The total amount of money that a country's government has borrowed, by various means, to cover its spending in excess of tax revenues.

Federal Budget Deficit

The shortfall when the federal government's expenditures exceed its revenues within a fiscal year.

Federal Budget Deficit

The financial situation where the federal government's expenditures exceed its revenues in a given fiscal year.

National Debt

The total amount of money that a country's government has borrowed by various means.