Question 1
Refer to the information provided in Table 6.1 below to answer the question(s) that follow.
Refer to Table 6.1. If the price of a soda is $2, the price of a hamburger is $6, and George has $14 of income, George's utility-maximizing combination of sodas and hamburgers per day is
◦ 1 soda and 2 hamburgers.
◦ 4 sodas and 1 hamburger.
◦ 3 sodas and 1.5 hamburgers.
◦ indeterminate from this information.
Question 2
Refer to the information provided in Table 6.1 below to answer the question(s) that follow.
Refer to Table 6.1. Assume that a store is giving hamburgers and sodas away for free. Consumers can have as many sodas and hamburgers as they want, but the food has to be consumed one unit at a time. If George has already had one soda and two hamburgers, then George should
◦ next consume a soda to maximize his utility.
◦ next consume a hamburger to maximize his utility.
◦ be indifferent between consuming the second soda or the third hamburger.
◦ consume neither another soda nor another hamburger to maximize his utility.
Terry Winters, Color and Information.
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