Assume James Purchases Only Two Goods,steak and Chicken,with His Weekly

question 5

Multiple Choice

Assume James purchases only two goods,steak and chicken,with his weekly income of $60.The price of steak is $10 and the price of chicken is $5.The following table shows the marginal utility James gets from each additional pound of steak and chicken: Given the above information,if the price of steak falls to $8,what quantities of steak and chicken should James purchase to maximize his utility?

• A)6 steak,2 chicken
• B)5 steak,3 chicken
• C)4 steak,4 chicken
• D)5 steak,4 chicken
• E)3 steak,6 chicken

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Definitions:

Owner's Equity Statement

A financial statement showing the changes in the equity of the company’s owners over a reporting period.

Net Income

The overall income a company retains following the deduction of all costs, such as taxes and operational expenses, from its gross revenue.

Assets

Resources owned by a company from which future economic benefits are expected to flow to the entity.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.