Question

Question Help Joe has $40 to spend on apples and oranges. Given the information in the following table, is Joo maximizing utility Marginal Total Utility of Last Product Price Quantity Utility Unit Apples $0.50 50 lbs. 1.250 Oranges $0.60 40 lbs. 1.200 Joe's marginal utility per dollar spent on apples is units of utility per dollar Joe's marginal utility per dollar spent on oranges is units of utility per dollar. The total amount of his income Joes spends on apples and oranges is dollars. Is Joo maximizing his utility? O A No, Joe is not maximizing his utility. If he spent more on oranges he could gain greater satisfaction per dollar spent. O B. Yes, Joe is maximizing his total utility Marginal utility per dollar spent on each good is equal, and he is spending his entire budget. OG. Yes, Joe is maximizing his total utility. Marginal tiltyper dolar spent on each good is equal, and he has some of his income that he does not spend on apples or oranges that he may save. OD. No, marginal utility per dollar spent on each good is equal, but Joe has some money left in his budget which could be used to increase his ubility,

Answer 1

Product Price Quantity Qu Total Utility Marginal Utility Of MU/P Last Unit 1250 25 1200 30 Apples 0.5 0.6 50 40 50 50 Oranges

Joe's marginal utility per dollar spent on apples is 50 units of utility per dollar

Joe's marginal utility per dollar spent on oranges is 50 units of utility per dollar

The total amount of his income Joe spends on apples and oranges is = $49

= (0.5 * 50 ) + ( 0.6 * 40 )

= 49

The answer is Option B

Marginal Utility per dollar = marginal utility/price