(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
This problem is going to ask you to find a consumption bundle that maximizes Brenda's utility, assuming she has only 8 dollars to spend and both bagels and coffee cost 2 dollars.
(Description)
The left table from the first slide is briefly shown.
The following text is briefly written above the table:
Brenda now has to make a decision about how many bagels and how much coffee to have for breakfast. She has 8 dollars of income to spend on bagels and coffee. Bagels cost 2 dollars each and coffee costs 2 dollars per cup. Which of the following combinations provides Brenda with the highest total utility and is within her budget?
(Speaker)
We are going to start by eliminating all bundles of bagels and cups off coffee that lie outside her budget constraint, bundles that cost more than 8 dollars.
We also want to eliminate all bundles where Brenda does not full the 8 dollars. She will be always be better off by spending her full budget. Since both bagels and cups of coffee cost 2 dollars, we are left with Brenda purchasing four items.
(Description)
The new table is shown. It is labeled as Consumption bundle.
The table consists of 3 columns: Quantity of bagels, Quantity of coffee (cups), Total utility (utils).
The table consists of 4 rows.
The first row: Quantity of bagels is, 0, Quantity of coffee is, 4 cups, Total utility is, 40 utils.
The second row: Quantity of bagels is, 1, Quantity of coffee is, 3 cups, Total utility is, 54 utils.
The third row: Quantity of bagels is, 2, Quantity of coffee is, 2 cups, Total utility is, 56 utils.
The fourth row: Quantity of bagels is, 3, Quantity of coffee is, 1 cups, Total utility is, 54 utils.
The following text is written above the table:
We want to look at the bundles that lie on Brenda's budget constraint. This means eliminating all bundles that do not cost 8 dollars.
(Speaker)
Once we remove the bundles that are too expensive or don't use her full budget, we can easily see Brenda's utility is maximized by consuming two bagels and two cups of coffee.
(Description)
The corresponding data in the third row of the table is highlighted. This row is labeled as A bundle of 2 bagels and 2 cups of coffee gives Brenda the highest total utility.
(Speaker)
At this point, she will have 56 utils of utility.