Assume That Product Alpha and Product Beta Are Both Priced

question 242

Multiple Choice

Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on Alpha and Beta. She buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40 and the marginal utility of Beta is 20. This indicates that

• A)Ellie should make no change in consumption.
• B)given another dollar, Ellie should buy an additional unit of Beta.
• C)in order to maximize utility, Ellie should buy more of Beta and less of Alpha.
• D)in order to maximize utility, Ellie should buy more of Alpha and less of Beta.

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Definitions:

Commitment

The state or quality of being dedicated to a cause, activity, or relationship.

Mutuality

The quality or condition of being mutual; reciprocal relations or feelings between individuals or groups.

Interdependence

A relationship between two or more parties where their actions and outcomes are mutually reliant on each other.

Parasocial Relationship

A one-sided relationship where one party knows a great deal about the other, who is typically a public figure or character, without any personal interaction.