Javon Is Consuming His Optimal Utility-Maximizing Consumption Bundle of Lobster

question 66

Multiple Choice

Javon is consuming his optimal utility-maximizing consumption bundle of lobster and macaroni-and-cheese dinners.Call this bundle A.His income is $100,the price of a macaroni-and-cheese dinner is $5,and the price of a lobster is $20.Put lobsters on the vertical axis and put macaroni-and-cheese dinners on the horizontal axis.His income increases to $500 and the prices of macaroni-and-cheese dinners and lobster remain constant.With the increase in income,Javon changes his consumption of the two goods and now maximizes utility at bundle B.If macaroni-and-cheese dinners are an inferior good for Javon:

• A)at bundle B,Javon consumes more macaroni-and-cheese dinners.
• B)at bundle B,Javon consumes less lobster.
• C)at bundle A and bundle B,the marginal utility of lobster is 5.
• D)at bundle B,Javon consumes more lobster.

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