Bill Uses His Entire Budget to Purchase Pepsi and Hamburgers

question 59

Multiple Choice

Bill uses his entire budget to purchase Pepsi and hamburgers, and he currently purchases no Pepsi and 6 hamburgers per week. The price of Pepsi is $1 per can, the price of a hamburger is $2, Bill's marginal utility from Pepsi is 2, and his marginal utility from hamburgers is 6. Is Bill's current consumption decision optimal?

• A) No, he should increase Pepsi consumption and reduce hamburger consumption.
• B) No, he should purchase more of both goods.
• C) Yes, the corner solution is best because his MRS is less than the price ratio.
• D) We do not have enough information to answer this question.

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Definitions:

Sleep Onset

The transition from wakefulness to sleep, marking the beginning of the sleep cycle.

Disorders Of Arousal

Sleep disorders that involve recurrent episodes of incomplete awakening from sleep that seem to mix elements of wakefulness and NREM sleep.

Sleep Terrors

A sleep disorder causing feelings of panic or dread typically occurring during the first hours of stage 3–4 non-rapid eye movement (NREM) sleep and lasting for 1 to 10 minutes.

Obstructive Sleep Apnea/Hypopnea Syndrome

A sleep disorder characterized by repeated episodes of partial or complete blockage of the airway during sleep.