Suppose You Eat at a Restaurant That Serves Clams at a Fixed

question 67

Multiple Choice

Suppose you eat at a restaurant that serves clams at a fixed price and crab legs at a price that varies based on market conditions.Each week, the marginal utility you attach to an order of crab legs is 100, and the marginal utility of an order of clams is 50.One week you have crab legs, but the next week you have clams.This means that

• A)you are irrational
• B)your tastes must have changed
• C)the price of clams dropped below the price of crab legs
• D)the price of crab legs increased
• E)the price of crab legs must have increased to more than twice that of clams

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at various price points at a given moment.

Inconsistency

The lack of uniformity or steadiness in actions, values, or outcomes, leading to unpredictability or variability.

Regulation

The establishment and enforcement of rules or laws by government or regulatory bodies to govern behavior in specific industries or areas.