Suppose the Price Of $A$ Is $\$ 20$ , the Price Of $B$

question 15

Multiple Choice

Suppose the price of $A$ is $\$ 20$ , the price of $B$ is $\$ 10$ , and that the consumer is currently spending all available income. At the consumer's current consumption basket the marginal utility of $A$ is 8 and the marginal utility of $B$ is 2 .

• A) The consumer is currently maximizing utility.
• B) The consumer could increase utility by consuming more of good \(A\) and less of good \(B\).
• C) The consumer could increase utility by consuming more of good \(B\) and less of good \(A\).
• D) Nothing can be said about the consumer's utility because we do not know the consumer's income or utility function.

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