Multiple Choice
Beth consumes two goods, x1 and x2, and her income is $120. The price of x1 is $10, and the price of x2 is $5. If her indifference curves exhibit a diminishing marginal rate of substitution and if her marginal rate of substitution at bundle (7, 10) is 1, then her utility maximizing bundle is:
A) (7, 10) .
B) (6, 12) .
C) on the budget line to the left of (7, 10) .
D) on the budget line to the right of (7, 10) .
Correct Answer:
Verified
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