Author Question: Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income. ... (Read 281 times)

FButt · **on:** Jun 29, 2018

Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income.

His marginal utility of chocolate is 200 and his marginal utility of vanilla is 200, and the price of chocolate is 1.00 per scoop and the price of vanilla is 2.00 per scoop. To maximize his utility, Bobby should
A) buy more chocolate ice cream and less vanilla ice cream.
B) buy more vanilla ice cream and less chocolate ice cream.
C) not change his purchases between chocolate ice cream and vanilla ice cream.
D) buy no vanilla ice cream.

Question 2

The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the consumer surplus is

A) 10 million.
B) 20 million.
C) 60 million.
D) zero.