Question

Jed's weekly budget for lunch is $24. he eats only pizza and burgers. each pizza costs $6 and each burger costs $3. jed knows that 2 pizzas and 4 burgers will give him a utility of 8. at his utility-maximizing point, jed's utility is:

Answer 1

At the utility-maximizing point the utility is 8. Jed only has $24. By buying 2 pizzas, he spends $12 and $12 more by buying 4 burgers. That combination exhausts the weekly budget and yields a utility of 8 that's obtained by combining the foods that bring about the maximum level of utility within the available budget.