Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Buy 10 units of water and no good X
B
Buy 5 units of water and 2 units of good X
C
Buy 3 units of water and 3 units of good X
D
Buy only good X to maximize satisfaction
Understanding the Answer
Let's break down why this is correct
Answer
To maximize her total utility, Maria should compare the marginal utility she gets from each dollar spent on water and good X. For water, the marginal utility per dollar is 9 divided by 3, which equals 3. For good X, the marginal utility per dollar is 12 divided by 6, which equals 2. Since the marginal utility per dollar for water is higher, Maria should spend more on water. Therefore, she should buy as much water as her budget allows before purchasing good X, ensuring she gets the most satisfaction from her money.
Detailed Explanation
Maria should buy 5 units of water and 2 units of good X. Other options are incorrect because Buying only water may seem good, but it doesn't use her budget wisely; This choice spreads her budget too thin.
Key Concepts
Marginal Utility
Budgeting
Resource Allocation
Topic
Marginal Utility and Budgeting
Difficulty
medium level question
Cognitive Level
understand
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