Learning Activity S

Kamila has $$30$ to spend on Pita Wraps and Bubble Tea. The price of a Pita Wrap is $56$ and the price of a glass of Bubble Tea is $$3.$

The utility to Kamila from consuming the two goods are given in the table below.

How many Pita Wraps and Bubble Teas should Kamila have to maximize her utility given the prices and income?

If Kamila can drink all the Bubble Tea she wants for free, how many glasses will she consume?

PITA WRAPS

BUBBLE TEAS

Quantity

$1$

$2$

Total utility

$60$

Marginal Utility

Marginal Utility per $

Quantity

$1$

$2$

$3$

Total utility

$40$

$70$

$91$

Marginal Utility

Marginal Utility per $

$102$

$132$

$144$

$144$

$106$

$112$

$115$

$138$

$128$

$115$

$3$

$4$

$4$

$5$

$5$

$6$

$7$

$6$

$7$

Part $2$

Draw a budget line for apples and oranges, using the following info:

Income: $$100$

Price of apples: $$5($apples on horizontal axis$)$

Price of oranges: $$5($oranges on vertical axis$)$