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For Dessert, Pranisha Has the Choice Between Cheesecake and Apple

question 44

Multiple Choice

For dessert, Pranisha has the choice between cheesecake and apple pie. Pranisha would gain marginal utility of 50 from a piece of cheesecake, while the price of cheesecake is R50 per slice. Pranisha would gain marginal utility of 30 from a piece of apple pie, and the price of apple pie is R30 per slice. Given this information, Ingrid should buy


Definitions:

Price Level

The aggregate price mean of the complete variety of goods and services within the economy.

Base Year

A specific year against which economic growth is measured, serving as a standard comparison for other years in index numbers and price comparisons.

Real GDP

The measure of a country's economic output adjusted for price changes, such as inflation or deflation, giving a more accurate depiction of an economy's size.

GDP

The total value of goods and services produced over a specific period in a country, known as Gross Domestic Product, reflects its economic productivity.

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