Use the Following to Answer Question 13

question 61

Multiple Choice

Use the following to answer question 13:
Figure: Water vs. Soda 2
-(Figure: Water vs. Soda 2) Refer to the figure. These figures show the marginal utility Janet receives when she consumes bottled water and soda. Both water and soda cost $1 each. If Janet has $5 in income, what mix of bottled water and soda will maximize Janet's utility?

• A) five bottles of water
• B) four bottles of water and three sodas
• C) three bottles of water and two sodas
• D) 2.5 bottles of water and 2.5 sodas.

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Definitions:

Selective Optimization

A strategy that involves focusing on and maximizing one's strengths while minimizing weaknesses through selection and optimization of resources.

Compensation

A psychological strategy or an organizational policy of providing benefits, often monetary, in exchange for work or to make up for a deficiency or injury.

Minimize

To reduce to the smallest possible amount or degree; to make something appear less important or significant.

Maximize

To increase something to its highest possible value or level.