Suppose Joe Is Maximizing Total Utility Within His Budget Constraint

question 19

Multiple Choice

Suppose Joe is maximizing total utility within his budget constraint.If the price of the last pair of jeans purchased is $25 and it yields 100 units of extra satisfaction and the price of the last shirt purchased is $20, then, using the rule of equal marginal utility per dollar spent, the extra satisfaction received from the last shirt must be

• A)2,000 units of utility.
• B)500 units of utility.
• C)100 units of utility.
• D)80 units of utility.

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Definitions:

Placebo Treatments

Inactive substances or procedures given to a participant in place of an actual treatment, used in research to test the effectiveness of therapies.

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after being associated with an unconditioned stimulus, comes to elicit a conditioned response.

Snake Phobia

An intense, irrational fear of snakes, which can cause emotional and physical reactions even in the absence of real danger.

Classical Conditioning

The act of learning through establishing a relationship between a stimulus that is environmentally based and another that occurs spontaneously in nature.