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Assume you can only spend your money on chocolate bars, candies, and cupcakes. A chocolate bar costs $1.00, a candy costs $1.00, and a cupcake
Assume you can only spend your money on chocolate bars, candies, and cupcakes. A chocolate bar costs $1.00, a candy costs $1.00, and a cupcake cost $0.50. The table below shows the marginal utility per dollar spent on each snack.
Quantity | MU/P (choco-bars) | MU/P (candies) | MU/P (cupcakes) |
1 | 15 | 14 | 12 |
2 | 13 | 11 | 9 |
3 | 11 | 9 | 8 |
4 | 9 | 7 | 7 |
5 | 7 | 5 | 6 |
6 | 5 | 3 | 4 |
7 | 3 | 1 | 2 |
8 | 1 | 0 | 0 |
9 | -1 | -1 | -3 |
10 | -2 | -3 | -5 |
11 | -4 | -5 | -8 |
12 | -7 | -7 | -15 |
If you have $8.00 to spend, how many of each item would you purchase in order to maximize utility?
4 chocolate bars, 3 candies, and 2 cupcakes
3 chocolate bars, 3 candies, and 3 cupcakes
2 chocolate bars, 1 candy, and 1 cupcake
3 chocolate bars, 2 candies, and 1 cupcake
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