# Suppose a man has a budget of $6 and donuts and ice cream sandwiches cost $1 each. According to...

## Question:

Suppose a man has a budget of $6 and donuts and ice cream sandwiches cost $1 each. According to the table, what is the consumer optimum?

Number of donuts | Total Utility of donuts | Marginal Utility of donuts | Number of ice cram sandwiches | Total Utility of ice cream sandwiches | Marginal Utility of ice cream sandwiches |
---|---|---|---|---|---|

0 | 0 | - | 0 | 0 | - |

1 | 10 | 10 | 1 | 8 | 8 |

2 | 19 | 9 | 2 | 15 | 7 |

3 | 26 | 7 | 3 | 21 | 6 |

4 | 30 | 4 | 4 | 25 | 4 |

5 | 30 | 0 | 5 | 27 | 2 |

6 | 29 | -1 | 6 | 27 | 0 |

_____ donuts

_____ ice cream sandwiches

## Maximizing Utility

Economics is all about making good choices under conditions of scarce resources. Finding the best option is a matter of maximizing utility: a phrase that economists use to quantify satisfaction or happiness.

## Answer and Explanation: 1

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View this answerAssuming that the man wants to spend his entire budget of $6 on either donuts or ice cream sandwiches, his two best options are to purchase 3 of each...

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Chapter 3 / Lesson 2Learn about utility maximization. Discover various types of utility, examine utility maximizing rules, and study examples of maximizing utilities in economics.

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