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Bridget has a limited income and consumers only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese. The price of wine is $10 per bottle and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridget’s utility, while the last pound of cheese added 40 units.

a. Is Bridget making the utility-maximizing choice? Why or why not?

b. If not, what should she do instead? Why?

Question ID
534276

Created
April 20, 2011 10:41pm UTC

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0

URL
https://questions.llc/questions/534276

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430

1 answer

  1. on the last, utility units/dollar

    wine: 50/10=5
    cheese: 40/4=10

    she should have traded the bottle of wine for more cheese.

    Answer ID
    534296

    Created
    April 20, 2011 10:56pm UTC

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    0

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