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Answer :
Final answer:
Without specific details about Dorothy's preferences through indifference curves, the exact utility-maximizing combination of coffee and scones cannot be determined. However, using Lilly's example, where choice B of three books and 84 doughnuts was her utility-maximizing choice, we can surmise that Dorothy's choice would also be at the point where her highest attainable indifference curve is tangent to her budget constraint.
Explanation:
Regarding Dorothy's daily consumption, without any context of utility functions or indifference curves, we cannot determine the exact utility-maximizing combination of coffee and scones. Typically in economics, a consumer's utility-maximizing choice is where the consumer's budget constraint is tangent to the highest possible indifference curve; this illustrates the optimal combination of goods that maximize utility given the consumer's income and prices of the goods.
Turning to Lilly's choice, which is a parallel example, the answer can be drawn from the given economic analysis. In Lilly's situation, choice B with three books and 84 doughnuts is her utility-maximizing choice. This is because choice B is on a higher indifference curve (Um) than choice G, which makes her happier given her budget constraint. This demonstrates how consumers allocate their limited resources across different goods to achieve the highest satisfaction. This application of economic theory shows us that, like Lilly, Dorothy's utility-maximizing choice would be where her indifference curve is tangent to her budget constraint, which can only be determined if we have information on her preferences in the form of indifference curves.
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