Austin Peaw Take a Take a Test -mary cooper- Microsoft Edge 12901 Econ 2200w(Mic

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Austin Peaw Take a Take a Test -mary cooper- Microsoft Edge 12901 Econ 2200w(Micro) Fall 2017 mary cooper Test:Chapter 10-B Subm This Question: 1 pt 42 of 9 (1 complete) This Test: 9 pts p The following table shows Madisons from porice of Coke is $3 00. IH Madison wants to maxinize her utility, how much popcom and Coke should she udliny fom consuming popcorn and Coke Suppose that Madson has income of $60 00, the price of popcom in $6.0, and th Popcorm Coke Quantity 72 48 24 12 108 72 36 18 Madison shoud bu,boses of popcorn vetane ot cate Enteryowresonses et ntngen) Entes your ansuer n each of the answer Dcss O Type here to seerch 8

Explanation / Answer

Budget Line: Price of popcorn x Quantity + Price of coke x Quantity = Income

6P + 9C = 60

Bundles that can be consumed with given income:

P = 1, C = 6. Total utility from this bundle 96 + 9 = 105

P = 4, C = 4. Total utility from this bundle 24 + 36 = 60

Utility is maximum at P = 1 and C = 6

So, Madison should buy 1 Popcorn and 6 coke.

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