Suppose That Fernando Allocates His Lunch Money to Pizza and Coke

question 197

Multiple Choice

Suppose that Fernando allocates his lunch money to pizza and Coke. A Coke costs $1 and a slice of pizza costs $1.50. The marginal utility of the last slice of pizza Fernando ate today was 30, and the marginal utility of his last Coke was 25. Fernando spent all of his lunch money. From this information, we can conclude that:

• A) Fernando allocated his money in a way that maximized his total utility.
• B) Fernando's total utility would have been higher if he had purchased more Coke and less pizza.
• C) Fernando's total utility would have been higher if he had purchased more pizza and less Coke.
• D) Fernando could have increased his total utility by purchasing more Coke but the same quantity of pizza.
• E) Fernando could have increased his total utility by purchasing more pizza but the same quantity of Coke.

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Definitions:

High-Pitched Stimulus

A sound or signal at the higher end of the auditory frequency range, often perceived as sharp or shrill.

Weber Fraction

A principle that quantifies the perception of change in a given stimulus according to the Just Noticeable Difference (JND).

Sense Modality

A way in which sensory information is processed, including vision, hearing, touch, taste, and smell.

Response Criterion

A threshold in decision making or sensory detection beyond which a stimulus is perceived or a response is made.