When plotted Sarah's indifference curve for coffee and tea reveals parallel indifference curves that always have a slope of -1. Suppose that Sarah's budget constraint is 20 -1.5C+1.0T where C is the quantity of coffee and T is tea. If Sarah wants to maximize utility, she will buy: a) equal amount of coffee and tea b) coffee only c) tea only d) more coffee than tea e) a combination of coffee and tea cannot be determined from the information given

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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When plotted Sarah's indifference curve for coffee and
tea reveals parallel indifference curves that always have
a slope of -1. Suppose that Sarah's budget constraint is
20 -1.5C+1.0T where C is the quantity of coffee and T is
tea. If Sarah wants to maximize utility, she will buy: a)
equal amount of coffee and tea b) coffee only c) tea
only d) more coffee than tea e) a combination of coffee
and tea cannot be determined from the information
given
Transcribed Image Text:When plotted Sarah's indifference curve for coffee and tea reveals parallel indifference curves that always have a slope of -1. Suppose that Sarah's budget constraint is 20 -1.5C+1.0T where C is the quantity of coffee and T is tea. If Sarah wants to maximize utility, she will buy: a) equal amount of coffee and tea b) coffee only c) tea only d) more coffee than tea e) a combination of coffee and tea cannot be determined from the information given
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