Juan Spends All of His Income on Packs of Baseball

question 103

Multiple Choice

Juan spends all of his income on packs of baseball cards and boxes of candy.At his current consumption bundle,the marginal utility of baseball card packs is 20 and the marginal utility of candy boxes is 10.Assuming that diminishing marginal utility applies to both goods,if the price of baseball card packs is $10 and the price of candy boxes is $2,Juan should:

• A)consume more baseball card packs and fewer candy boxes.
• B)consume more candy boxes and fewer baseball card packs.
• C)continue to consume the current bundle.
• D)consume equal numbers of baseball card packs and candy boxes.

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Definitions:

Denotes Failure

Indicates an instance or condition of not meeting a desired or intended objective, often used in the context of tests or experiments.

Probability

A measure of the likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.

Scholarships

Financial grants provided to students based on academic or other achievements to support their education.

Variance

A statistical measure that describes the dispersion of data points in a dataset relative to their mean.