Bobby Consumes Only Chocolate Ice Cream and Vanilla Ice Cream

question 128

Multiple Choice

Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income. His marginal utility of chocolate is 200 and his marginal utility of vanilla is 200, and the price of chocolate is $1.00 per scoop and the price of vanilla is $2.00 per scoop. To maximize his utility, Bobby should

• A) buy more chocolate ice cream and less vanilla ice cream.
• B) buy more vanilla ice cream and less chocolate ice cream.
• C) not change his purchases between chocolate ice cream and vanilla ice cream.
• D) buy no vanilla ice cream.

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Definitions:

Uncertain Event

An event whose occurrence or outcome is not known or predictable with certainty, often associated with risk assessment.

Condition

A stipulation or requirement in a contract that must be met for the contract to be fully enforceable.

Anticipatory Repudiation

A contractual condition where one party indicates they will not fulfill their contractual duties before the time of performance is due.

Unforeseeable Circumstances

Events that could not have been predicted and therefore are out of the control of the contracting parties, often impacting contracts.