Register
Garcia is currently spending his entire lunch budget on 3 sodas and 4 hot dogs. At his current level of consumption, Garcia's marginal utility for sodas is 5 utils and his marginal utility for hot dogs
226k views
5 votes
Garcia is currently spending his entire lunch budget on 3 sodas and 4 hot dogs. At his current level of consumption, Garcia's marginal utility for sodas is 5 utils and his marginal utility for hot dogs is 10 utils. In order to maximize his total utility, Garcia should

ANSWER: maintain his current level of consumption if the price of soda i $1 and the price of a hot dog is $2

I need an explannation on why this is correct

User Schotime
by
5.6k points

1 Answer

1 vote

Answer:

He should maintain this because since he is buying 3 sodas and 4 hot dogs they each one cost 2 and 1 respectively that would mean that for each dollar he spends he gets one utility.If he shifts the balance he might not max out his utility per dollar.

Step-by-step explanation:

User Ofaurax
by
5.6k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.9m questions

7.7m answers

Other Questions

What are some ways you can save on car insurance?
_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
Demonstrate how binomial nomenclature is related to classification systems by identifying the genus name and the specific name of the domestic cat felis catus
The dark printed words on the page of a book are easily read because they are printed on a light ground. this is an example of the principle of ____________.
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
Link Copied!