The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-Jen spent her weekly allowance of $110 on clothes and cosmetics. Assume that she had allocated $100 to shoes and $10 to lipsticks and is in equilibrium. What can you conclude from her purchase decisions?
A)She likes shoes ten times as much as she likes lipsticks
B)Jen liked the last pair of shoes ten times as much as the last tube of lipstick
C)Jen purchased hundred pairs of shoes for each tube of lipstick
D)She likes lipsticks ten times as much as she likes shoes
E)She purchased one pair of shoes for each tube of lipstick

Question

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3
 
-Jen spent her weekly allowance of $110 on clothes and cosmetics. Assume that she had allocated $100 to shoes and $10 to lipsticks and is in equilibrium. What can you conclude from her purchase decisions?
A)She likes shoes ten times as much as she likes lipsticks 
B)Jen liked the last pair of shoes ten times as much as the last tube of lipstick 
C)Jen purchased hundred pairs of shoes for each tube of lipstick 
D)She likes lipsticks ten times as much as she likes shoes 
E)She purchased one pair of shoes for each tube of lipstick

Quizplus · Accepted Answer

Jen's spending pattern suggests that the marginal utility per dollar spent on shoes is equal to the marginal utility per dollar spent on lipsticks, indicating she liked the last pair of shoes ten times as much as the last tube of lipstick, given the 10:1 spending ratio.

The Below Table Shows the Average Utility (In Utils) Obtained