📚 Learning Guide
Consumer Utility Maximization
easy

Maria has a budget of $20 to spend on fruit. She can buy apples for $2 each and bananas for $1 each. After her first purchase, she finds she enjoys bananas more. How should she adjust her spending to maximize her utility given her preferences?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

Buy 10 bananas to maximize quantity.

B

Buy 5 apples and 5 bananas to balance her consumption.

C

Buy only bananas until her budget is exhausted.

D

Buy 2 apples and 16 bananas to match her preferences.

Understanding the Answer

Let's break down why this is correct

Answer

To maximize her utility, Maria should focus on buying more bananas since she enjoys them more than apples. With her budget of $20, she can buy 20 bananas for $1 each, which would give her a lot of fruit to enjoy. If she decides to buy apples instead, she could only buy 10 apples for $2 each, which would not provide as much satisfaction since she prefers bananas. Therefore, after her first purchase, she should spend her money mainly on bananas to get the most enjoyment from her budget. By adjusting her spending this way, she can make sure she enjoys her fruit more while staying within her budget.

Detailed Explanation

Maria should buy only bananas because she enjoys them more. Other options are incorrect because Buying 10 bananas means she spends all her money on just one fruit; Buying 5 apples and 5 bananas splits her money.

Key Concepts

Consumer Utility Maximization
Marginal Utility
Budget Constraints
Topic

Consumer Utility Maximization

Difficulty

easy level question

Cognitive Level

understand

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