MsBirnbaum Is Buying Bottles of Beer and Bags of Pretzels

question 49

Multiple Choice

Ms.Birnbaum is buying bottles of beer and bags of pretzels.The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30.The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag.Ms.Birnbaum

• A)is buying beer and pretzels in the utility-maximizing amounts.
• B)should buy more beer and fewer pretzels.
• C)should buy more pretzels and less beer.
• D)is not spending all her income.

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Definitions:

Oral Contract

A verbal agreement between parties that is legally binding, provided it meets all requirements of a valid contract.

Reasonable Reliance

Reasonable reliance involves acting based on the expectation that the information or promises provided by another party are accurate and trustworthy.

Interest in Land

Legal rights or investments in real property, including ownership or the right to use the land under certain conditions.

Suretyship

A contractual arrangement where one party (the surety) guarantees the performance of a second party (the principal) to a third party (the obligee).