Figure 22-14Refer to Figure 22-14. Suppose the price of good X is $8, the price of good Y is $10, and the consumer's income is $360. Then the consumer's optimal choice is to buyGroup of answer choices40 units of good X and 4 units of good Y.30 units of good X and 12 units of good Y.15 units of good X and 24 units of good Y.20 units of good X and 20 units of good Y.
Question
Figure 22-14Refer to Figure 22-14. Suppose the price of good X is 10, and the consumer's income is $360. Then the consumer's optimal choice is to buyGroup of answer choices40 units of good X and 4 units of good Y.30 units of good X and 12 units of good Y.15 units of good X and 24 units of good Y.20 units of good X and 20 units of good Y.
Solution
To find the consumer's optimal choice, we need to find the combination of goods X and Y that the consumer can afford that maximizes their utility.
Given the prices of goods X and Y and the consumer's income, we can calculate how many units of each good the consumer can afford.
The price of good X is 10. The consumer's income is $360.
Let's calculate how many units of each good the consumer can afford for each of the given options:
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40 units of good X and 4 units of good Y: The total cost would be 40*10 = 40 = $360. This is exactly the consumer's income, so this is a possible choice.
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30 units of good X and 12 units of good Y: The total cost would be 30*10 = 120 = $360. This is also a possible choice.
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15 units of good X and 24 units of good Y: The total cost would be 15*10 = 240 = $360. This is also a possible choice.
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20 units of good X and 20 units of good Y: The total cost would be 20*10 = 200 = $360. This is also a possible choice.
Without additional information about the consumer's preferences or the utility they derive from goods X and Y, we cannot determine which of these options is the consumer's optimal choice. All of the options are affordable for the consumer and could potentially be their optimal choice depending on their preferences.
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