A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table. If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases?
A) a hard candy, followed by another hard candy
B) a hard candy, followed by a chocolate
C) a chocolate, followed by a hard candy
D) a chocolate, followed by another chocolate

Question

A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table.  If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases?
A) a hard candy, followed by another hard candy 
B) a hard candy, followed by a chocolate 
C) a chocolate, followed by a hard candy 
D) a chocolate, followed by another chocolate

Quizplus · Accepted Answer

The Answer of A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table.  If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases?
A) a hard candy, followed by another hard candy 
B) a hard candy, followed by a chocolate 
C) a chocolate, followed by a hard candy 
D) a chocolate, followed by another chocolate

A Child Is Given $4 of Pocket Money to Be