Purchase Solution

Is Bridget making the utility-maximizing choice?

Not what you're looking for?

Ask Custom Question

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 Bridgetâ??s utility, while the last pound of cheese added 40 units. PLEASE SHOW SLOPE IN A GRAPH

a. Is Bridget making the utility-maximizing choice? Why or why not?
b. If not, what should she do instead? Why?

Purchase this Solution
Solution Summary

A Complete, Neat and Step-by-step Solution is provided in the attached file.

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Utility Maximization

    Is Bridget making the utility-maximizing choice? Why or why not?

  • Utility Maximization and Consumption

    Is Bridget making the utility-maximizing choice? Why or why not?

  • Wine and Cheese: Is Bridget making the utility-maximizing choice?

    The price of the 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 last pound of cheese added 40 units. a. Is Bridget making the utility-maximizing choice?

  • Utility-maximizing choice; price elasticity, Wilpen Company

    Bridget is not making the utility maximizing choice. At utility maximizing combination, the marginal utility per unit of money spent is equal for each good.

  • Utility maximizing choice

    The utility maximization condition is that: MUx/MUy = Px/Py MUx/MUy = 50/40 = 1.25 Px/Py = 10/4 = 2.5 Since the optimal condition is not met, Fred is not making a utility maximizing choice.

  • Competition is the disciplinarian of the market economy

    The basis of the competition in the market system is the freedom of choice that is exercised in pursuit of a monetary return.

  • Economics: Sunk Costs and Utility

    Maximizing utility plays part in ensuring that an individual makes decisions which improves the overall well being of a person and maximizing their utility as well. Utility maximization is usually obtained at the top of a total utility curve.

  • Finding Utility-Maximizing Demand for Goods

    42822 Solve for consumer's optimal choice (i.e. utility-maximizing bundles of goods) given a specific utility function. Calculate the expenditure function. Let U(x,y) = x * (y^2) 1.

  • indifference curves and budget constraints

    That is, health or health status increases utility and health is an increasing function of medical goods. a. Illustrate the individualâ??s utility-maximizing choice of . b. Next, on the same graph, show the effects of the individual â??

View More Related Solutions