If a Consumer Purchases a Combination of Commodities a and B

question 43

Multiple Choice

If a consumer purchases a combination of commodities a and b such that MU_a/P_a = 100
And MU_b/P_b = 80, to maximize utility, the consumer should buy:

• A) less of both a and b.
• B) more of a and less of b.
• C) less of a and more of b.
• D) more of both a and b.

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Definitions:

Unilateral Mistake

An error made by one party in the understanding or interpretation of facts or law related to a contract, which may not necessarily void the contract.

Material Fact

Any fact that is significant or essential to the subject matter of a contract or legal proceeding, which if known, might have altered the decision of a party.

Innocent Misrepresentation

A false statement made without knowledge of its falsity, leading to a contract or agreement that can be voided.

Commercial Disparagement

A false or misleading statement made about a business's goods or services intended to dissuade others from dealing with the business.