Suppose that Fiona spends all of her income on 10 units of good X and 14 units of good Y. Fiona's marginal utility from the 10ᵗʰ unit of good X is 24 utils, and her marginal utility from the 14ᵗʰ unit of good Y is 20 utils. If the price of good X is $8 per unit and the price of good Y is $5 per unit, then to comply with the rational spending rule, Fiona should:
A) purchase more than 10 units of good X and less than 14 units of Y.
B) purchase less than 10 units of good X and more than 14 units of good Y.
C) purchase more than 10 units of good X and more than 14 units of good Y.
D) continue to purchase 10 units of good X and 14 units of good Y.
Correct Answer:
Verified
Q75: Suppose a cup of tea costs $0.60
Q76: Taylor's marginal utility from watching movies
Q77: Suppose that at Miles's current level of
Q78: Angela is currently playing five games of
Q79: At his current level of consumption, Evan
Q81: Refer to the accompanying table. If the
Q82: Refer to the accompanying table. If the
Q83: The rational spending rule is derived from
Q84: Refer to the accompanying table. If the
Q85: Suppose Suzanne allocates her spending on apples
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