Asked by
Ahanaf Rasheed
on Nov 04, 2024
Verified
Juanita is spending her entire income on goods X and Y. Her marginal utility from the last unit of X is 50 and the marginal utility from the last unit of Y that she consumes is 100. Juanita's utility is only maximized if
A) the prices of X and Y are the same.
B) the price of good X is twice that of good Y.
C) the price of good Y is twice that of good X.
D) We cannot determine whether Juanita is maximizing her utility.
Marginal Utility
The added satisfaction or utility gained from consuming an additional unit of a good or service.
Spending
Engaging in transactions to acquire goods or services by spending money.
Income
Earnings accrued from work or investment sources on a consistent basis.
- Execute the utility maximization theory to explore how consumers decide between multiple goods.
- Handle the task of discovering optimal goods combinations within the bounds of budget constraints.
Verified Answer
CC
Learning Objectives
- Execute the utility maximization theory to explore how consumers decide between multiple goods.
- Handle the task of discovering optimal goods combinations within the bounds of budget constraints.