Tyrell Has $50 Per Week to Spend on Good A

question 132

Multiple Choice

Tyrell has $50 per week to spend on good A, which has a price of $5, and good B, which has a price of $4. He buys six units of A and five of B. The marginal utility of the sixth unit of A is 25, and the marginal utility of the fifth unit of B is 20. Which of the following is true?

• A) He is maximizing his utility.
• B) We cannot tell if he is maximizing his utility unless we know his total utility.
• C) He is not maximizing his utility and should buy more of A.
• D) He is not maximizing his utility and should buy more of B.
• E) He is not maximizing his utility because he is not spending all of his income.

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Definitions:

Anatomy

The branch of science concerned with the structure of living organisms.

Anatomical Position

Refers to the standardized stance in human anatomy where the body stands upright, feet together, arms at the side, and face, palms, and toes directed forward.

Palms

The inner surface of the hands from the wrist to the base of the fingers, often used for sensing texture and manipulating objects.

Medial

Situated toward the midline of the body or a structure.