Table 10-3 -Refer to Table 10-3.The Table Above Shows Lee's Marginal Utility

question 135

Multiple Choice

Table 10-3

-Refer to Table 10-3.The table above shows Lee's marginal utility per dollar from consuming ice cream cones and cans of Lime Fizz Soda.The price of an ice cream cone is $2 and the price of Lime Fizz Soda is $1.Use this information to select the correct statement.

• A)We cannot determine how many ice cream cones and cans of Lime Fizz Soda Lee will consume without knowing what his income is.
• B)To maximize his utility Lee should consume 1 ice cream cone and 5 cans of Lime Fizz Soda.
• C)We cannot determine how many ice cream cones and cans of Lime Fizz Soda will maximize Lee's utility because we are given only the marginal utility per dollar values. We also need to know the marginal utility for each quantity.
• D)If Lee has an unlimited budget he will maximize his utility by buying only Lime Fizz Soda.

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Definitions:

FOIL Method

A method used in algebra to multiply two binomials, where FOIL stands for First, Outside, Inside, Last.

Binomials

Pairs of words or terms, often connected by a conjunction, that express a single idea or entity in mathematics, biology, and language.

Commutes

The act of traveling between one’s home and place of work on a regular basis, which can impact one’s work-life balance and daily schedule.

Distraction

Anything that diverts attention away from the focus of activity, potentially decreasing productivity or quality of work.