Alexandra consumes only caviar and champagne, but she does have a limited income

Question

Alexandra consumes only caviar and champagne, but she does have a limited income of $400. Her current consumption choice is 5 ounces of caviar, at a price of $50 per ounce, and 6 bottles of champagne, at $25 each. The last ounce of caviar added 100 units to Alexandra's total utility, while the last bottle of champagne added 75 units. If Alexandra chooses 4 ounces of caviar and 8 bottles of champagne instead: a. her total utility will increase by 150 units b. her total utility will decrease by 150 units c. her total utility will increase by 100 units d. her total utility will decrease by 100 units e. her total utility will increase by 50 units

Explanation / Answer

her total utility will increase by 50 units

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