Question

Reference: Ref 6-15 Bottled Water Quantity Total Utility Bags of Chips Quantity Total Utility 1 2 40 70 90 100 106 60 90 105 114 120 2 4 4 29. (Table) In the table, assume that a consumer has a budget of $12, water costs $2 per bottle, and chips cost $3 per bag. When utility is maximized, the MUIP for both goods is: A) 20 B) 5 C) 3. D) 10. 30. Suppose you have $100 to spend on two goods: $20 for DVDS or $10 for books. Which combination of the two goods is NOT on the budget line? A) eight books, one DVD B) four books, three DVDS D) two books, four DVDS. C) seven books, three DVDS. ot nud

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering one question.

30.

Ans: C

Explanation: Budget is given as:

20 DVD + 10 book = 100

or

2 DVD + book = 10

In case of 7 books, 3 DVDs, total cost = 70 + 60 = 130 (not in budget).

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