Assume Amanda Always Maximizes Her Total Utility Given Her Budget

question 111

Multiple Choice

Assume Amanda always maximizes her total utility given her budget constraint.Every morning for breakfast she has two eggs and three sausages.If the marginal utility of the last egg is 10 utils and the price of eggs is $1 each,what can we say about the marginal utility of the last sausage if the price of each sausage is $2?

• A)It must be equal to 20 utils.
• B)It must be equal to 10 utils.
• C)It must be equal to 5 utils.

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Definitions:

Perfectly Elastic

Perfectly elastic refers to a situation where the quantity demanded or supplied of a good changes infinitely in response to any change in price, represented by a horizontal demand or supply curve.

Inelastic

Describes a situation where the demand or supply for a product doesn't change significantly when the price of the product changes.

Stadium Capacity

The maximum number of spectators that a sports venue can accommodate during an event.

Supply of Seats

Refers to the number of seats available, often in context to theaters, vehicles, or other venues where seating is limited.