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Carolyn Spends Her Income on Popular Magazines and Music CDs

Question 27

Multiple Choice

Carolyn spends her income on popular magazines and music CDs. If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys


A) both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazine purchased.
B) both goods until the marginal utility of the last magazine purchased is four times the marginal utility of the last CD purchased.
C) four times as much magazines as CDs.
D) four times as much CDs as magazines.

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