Use the Following to Answer Questions

question 69

Multiple Choice

Use the following to answer questions:
Figure: Water vs. Soda
-(Figure: Water vs. Soda) Refer to the figure. The figure represents the marginal utility Janet receives when she consumes bottled water and soda. The prices of bottled water and sodas are both $1 each. Janet has $2 to spend and consumes two bottles of water and no soda.

• A) She would be better off if she consumed one bottle of water and one soda.
• B) She would be better off if she consumed two sodas instead of two bottles of water.
• C) She is maximizing her utility.
• D) The marginal utility of soda will be higher than the marginal utility of bottled water.

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Definitions:

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