# How do you calculate optimal consumption bundle?

Use this equation and the equation for BL2 to find the optimal bundle: Y = 25 – (1/4)(4Y) or Y = 12.5. When Y = 12.5 then x = 50. The individual’s level of utility from consuming this consumption bundle is U = XY = (50)(12.5) = 625 units of utility.

Consequently, what is the total utility at the optimal consumption bundle?

An individual chooses the consumption bundle that maximizes total utility, the optimal consumption bundle. The optimal consumption rule says that at the optimal consumption bundle the marginal utility per dollar spent on each good and service—the marginal utility of a good divided by its price—is the same.

what is a consumption bundle? A consumption bundle is a set of goods that a consumer may choose to consume.

One may also ask, what is an optimal bundle?

Def: The optimal consumption bundle is the bundle of goods that is both affordable (con- tained in the budget constraint) and the most preferred by the consumer (highest indifference curve). This optimal consumption bundle is the bundle of goods the consumer will choose.

What is the optimal level of consumption?

The optimal consumption rule says that when a consumer maximizes utility, the marginal utility per dollar spent must be the same for all goods and services in the consumption bundle.