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:

Infectious Agents

Microorganisms or pathogens that cause diseases or infections in humans, animals, or plants, including bacteria, viruses, fungi, and parasites.

Post-traumatic Growth

A positive psychological change experienced as a result of the struggle with highly challenging life circumstances.

Psychological Functioning

The efficiency and health of cognitive, emotional, and behavioral aspects of an individual's mental state.

Traumatic Event

An incident that causes psychological, emotional, or physical harm, leading to lasting effects on an individual's well-being.