Asked by
Marzan Rahman
on Nov 04, 2024Verified
The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that
A) a donut is four times more valuable than a cup of coffee.
B) the coffee to donuts price ratio is one to four.
C) the coffee to donuts price ratio is four to one.
D) this person always eats donuts with coffee.
Marginal Utility
The extra pleasure or advantage gained from using another unit of a product or service.
Utility
A measure of satisfaction or pleasure that a consumer obtains from consuming goods and services.
Coffee
A brewed drink prepared from roasted coffee beans, the seeds of berries from certain Coffea species, consumed worldwide for its stimulating effects.
- Utilize the maximization of utility theory to analyze the selection process of consumers for different goods.
- Calculate marginal utility given total utility data.
Verified Answer
MD
Learning Objectives
- Utilize the maximization of utility theory to analyze the selection process of consumers for different goods.
- Calculate marginal utility given total utility data.