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March 28, 2017

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Bridget has a limited income and consumes only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese. The price of wine is $10 per bottle and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridget's utility, while the las pound of cheese added 40 units
a. Is Bridget making the utility-maximizing choice, Why or Why not?
b. If not, what should she do instead?

  • Math - ,

    I'm not sure what these utility units are, but think of the following:

    $10 bottle of wine = 50

    This is $.20/unit.

    $4 of cheese = 40

    This is $.10/unit.

    Does this help with your problem?

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