& Moving to another question will save this response 1 points on coffee and gaso
ID: 1138402 • Letter: #
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& Moving to another question will save this response 1 points on coffee and gasoline is $200 each are on her budget line Bundle Quantity of Coffee in Total Usility from Quantity of Gasoline in Total Ubility from on Consumption Bundle Bundle Coffee Gasoline in 120 utils 90 utils 50 utils O utils 0 utils 40 utils 55 utils 65 utils 70 utils 75 (Table Denise's Consumption of Coffee and Gasoline) Look at the table Denise's Consumption of Coffee and Gasoline. Given the information provided, the price of each cup of coffee is and the price of each gallon of gasoline is-- A $3 $3 D $2, $2 7 ofExplanation / Answer
Let Coffee be denoted by 'C' and Gasoline by 'G'.
Let price of coffee = PC
And, that of gasoline = PG
Total spending = $200
Total spending =(Price x Quantity) of coffee + (Price x Quantity) of gasoline
=> (PC x QC) + (PG x QG) = 200
# At consumption bundle A, QC = 200 and QC = 0
=> (PC x 200) + (PG x 0) = 200
=> (PC x 200) + (0) = 200
=> PC x 200 = 200
=> PC = 200/200
=> PC = $1
Thus, price of coffee = $1
# At consumption bundle E, QC = 0 and QG = 100
=> (PC x 0) + (PG x 100) = 200
=> (0) + (PG x 100) = 200
=> PGx 100 = 200
=> PG = 200/100
=> PG = $2
Thus, price of each gallon of gasoline = $2
Therefore, the correct answer is option C. $1; $2
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