If a Consumer Purchases a Combination of Commodities a and B

question 159

Multiple Choice

If a consumer purchases a combination of commodities a and b such that MU_a/P_a = 50 and MU_b/P_b = 40, to maximize utility, the consumer should buy:

• A) less of both a and b.
• B) more of both a and b.
• C) more of a and less of b.
• D) less of a and more of b.

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Definitions:

Seatbelts

Safety devices designed to secure the occupants of a vehicle against harmful movement that may result during a collision or a sudden stop.

Microeconomics

The branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

National Output

The total value of all goods and services produced by a country's economy in a specific period.

Economic Units

Entities such as households, businesses, and governments that engage in economic activities including production, consumption, and exchange of goods and services.