Suppose the Price of a Pair of Jeans Is $25

question 77

Multiple Choice

Suppose the price of a pair of jeans is $25 and the price of a t-shirt is $15. The consumer's budget is entirely allocated. If the marginal utility from a pair of jeans is 100 units and the marginal utility from a t-shirt is 75 units, the consumer is

• A) not in equilibrium and should purchase more t-shirts and more jeans.
• B) not in equilibrium but should maintain the current level of purchases.
• C) in equilibrium because his or her utility is maximised.
• D) not in equilibrium and should purchase fewer t-shirts and more jeans.
• E) not in equilibrium and should purchase fewer jeans and more t-shirts.

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Definitions:

Formal Language

A set of strings constructed using the formal grammar, often used in computer science, mathematics, and linguistics.

Reasonable Time

A legal standard that refers to the amount of time that is fairly appropriate, given the circumstances, to perform a certain action.

Substantial Performance

Substantial performance refers to a situation where a party has fulfilled enough of their contractual obligations to warrant payment, even if minor elements are still uncompleted.

Strict Performance

A legal concept that requires parties to completely fulfill the obligations of a contract without deviation.