Optimal Choice of Milk and Honey. The price of milk is $2 per gallon, and the price of honey is $4 per jar. Hal's income is $16. Assuming that Hal spends all of his income on honey and milk, the combination of milk and honey that will maximize his total utility is jars of honey and gallons of milk.

Assuming that Hal spends all of his income on honey and milk, the combination of milk and honey that will maximize his total utility is 2 jars of honey and 4 gallons of milk.

Explanation:

This question is missing a table that should be as follows:

quantity    total util.       marginal        quantity    total util.       marginal  

of milk        from milk     utility per $   of honey   from honey  utility per $

1                     32                  16                  1                  44                11

2                    60                  14                 2                 84                10

3                    84                  12                  3                120                 9

4                   104                  10                  4                152                 8

5                   120                   8                  5                180                 7

6                   132                   6                  6                204                6

7                   140                   4                   7                224                5

8                   144                   2                   8                240                4

We should purchase quantities that yield the same marginal utility per dollar spent, options are:

answer; no individual buyer or seller has any significant impact on the market price;