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If a Consumer Maximizes Her Preferences Subject to Her Budget

Question 57

Multiple Choice

If a consumer maximizes her preferences subject to her budget by choosing a consumption bundle where the ratio of her marginal utilities of shelter and food, MUS/MUF, is greater than the ratio of the prices of shelter and food, pS/pF, then she must


A) be consuming food but no shelter.
B) be consuming shelter but no food.
C) believe that shelter is a "bad."
D) be consuming both food and shelter.
E) not be spending all of her income.

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