Question

Is Alyssa currently maximizing her utility? 0 O No; she could buy less fruit and more cheese, not spend any more money, and be better off. 0 O Yes; the marginal utility she receives from her last pound of cheese equals that of her last pound of fruit. 0 O No; she likes fruit and cheese more than other goods, so she should buy more of both. No; she could buy more fruit and less cheese, not spend any more money, and be better off. For each of the following combinations of cheese and fruit, calculate the marginal utility per dollar from the last pound of cheese and the last pound of fruit. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. Fruit (Pounds) Combination Consumer Equilibrium? Cheese (Pounds) 20 40 30 50 30 20 30 40 Suppose Alyssa has an "appetizer budget" of $130 per week, which she spends on cheese and fruit. To maximize her utility, Alyssa will purchase pounds of cheese and pounds of fruit per week.

Answer 1

1) MCQ

Option A)

At Utility Maximization : MU/P is Equalized across all goods

At current combination

MUC/PC = 12/1 IS NOT EQUAL TO MUf/Pf = 12/2 = 6

& As MUc/Pc > MUf/Pf

So consume more C than F

Combination	C	MUc/Pc	F	MUf/Pf	consumer eqm
A	20	16	30	5	No
B	40	8	20	6	No
C	30	12	30	5	No
Download	50	4	40	4	yes

Budget : 130

At eqm, MUc/Pc = MUf/Pf

MUc/MUf = Pc/Pf = 1/2

BC: C + 2F = 130

& C/F = 50/40 = 5/4 = 1.25

put, C = 1.25F

3.25F = 130

F* = 40

C* = 50

​​​

Cheese : 50 pound

Fruits : 40 pound