Solved

Sam Always Tries to Maximize His Utility in His Consumption

Question 462

Essay

Sam always tries to maximize his utility in his consumption of popcorn and soft drinks.Both of these goods are subject to diminishing marginal utility.Suppose the prices of these goods, along with Sam's income, do not change, but Sam decides he needs to decrease his consumption of popcorn.Holding everything else constant, this means that Sam would need to:
A.increase his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will be greater than it was initially.
B.decrease his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will be greater than it was initially.
C.increase his consumption of soft drinks, and his marginal utility per dollar spent on popcorn will be less than it was initially.
D.decrease his consumption of soft drinks, and his marginal utility spent on popcorn will be less than it was initially.

Correct Answer:

verifed

Verified

increase his consumption of so...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents