Mr Samuelson's Current Rates of Purchase Are Such That the Marginal

question 253

Multiple Choice

Mr. Samuelson's current rates of purchase are such that the marginal utility of slacks is 18 and the marginal utility of ties for him is 5. If slacks and ties are priced at $12 and $2, respectively, it can be concluded that Mr. Samuelson

• A)is spending too much on slacks and not enough on ties.
• B)is spending too much on ties and not enough on slacks.
• C)is spending his income in such a way as to maximize his satisfaction.
• D)should buy six times as many ties as he does slacks.

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Definitions:

Vasoconstriction

The narrowing of blood vessels, which increases blood pressure and decreases blood flow to certain areas.

Branch

A part of a tree that grows out from the trunk or from a bough.

Skeletal Muscle

A type of striated muscle tissue which is attached to bones and is responsible for their movement.

Smooth Muscle

Involuntary, non-striated muscle found in the walls of internal organs and blood vessels, responsible for their contraction and movement.