Ms Birnbaum Is Buying Bottles of Beer and Bags of Pretzels

question 9

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:

Obsessive-Compulsive Behaviors

Patterns of behavior characterized by intrusive thoughts (obsessions) and repetitive behaviors or mental acts (compulsions) performed in response.

Modeling

The process of representing real-life systems through mathematical formulas and simulations.

Social Withdrawal

The avoidance of social interactions and situations, often due to anxiety or preference for solitude.

Transference

A phenomenon in psychoanalysis whereby patients project feelings about important people from their past onto the therapist.