A Utility-Maximizing Consumer Is Currently Spending All of His/her Income

question 29

Multiple Choice

A utility-maximizing consumer is currently spending all of his/her income on two products, A and B. The MU of the last unit of A consumed is 50, the price of A is $25, and the price of B is $10. The MU of the last unit of B consumed is:

• A) 50.
• B) 5.
• C) 2.
• D) 20.

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Definitions:

Excess Water

A surplus amount of water beyond what is needed or used, often leading to conditions like waterlogging in plants or overhydration in humans.

Fresh Water

Water that is not salty, often found in rivers, lakes, and streams, and is essential for many forms of terrestrial life.

Distinct Zones

Separate or clearly different areas within a particular space or environment.

Northwestern Coast

A geographical term referring to the coastal areas located in the northwestern part of a continent or country, often characterized by specific climatic and ecological features.