Michelle spends all of her income on mangos and rice. Mangos cost $2 per pound and rice costs $1.50 per pound. If Michelle is spending all of her income and the marginal utility per dollar spent is 20 for the last pound of mangos purchased and 10 for the last pound of rice purchased, then
A) Michelle is maximizing utility from her present consumption bundle.
B) Michelle should buy more rice and fewer mangos in order to maximize utility.
C) Michelle should buy more mangos and less rice to maximize utility.
D) None of the above answers is correct.
Correct Answer:
Verified
Q132: Bobby consumes only chocolate ice cream and
Q133: Fred spends all of his income on
Q134: A consumer maximizes total utility when all
Q135: Pam buys only thread and fabric, and
Q136: Robinson spends all his income on mangos
Q138: Robinson spends all his income on mangos
Q139: If a consumer spends all of his
Q140: Lisa is spending all of her income
Q141: Suppose Hank spends his entire budget buying
Q142: Suppose Hanna spends her entire budget buying
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents