Jason Is Trying to Decide Whether to Buy a Bagel

question 77

Multiple Choice

Jason is trying to decide whether to buy a bagel or a muffin for breakfast.The bagel costs $.50 and has a marginal utility of 5.The muffin costs $1 and has a marginal utility of 20.Which should he buy,and why?

• A)The muffin,because it has a higher marginal utility
• B)The muffin,because it has a lower marginal utility per dollar
• C)The bagel,because it costs less
• D)The bagel,because it has a higher marginal utility per dollar
• E)The muffin,because it has a higher marginal utility per dollar

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Definitions:

Operating Expenses

Costs that a business incurs through its normal business operations, such as wages, rent, and utilities.

Wholesaler

A person or company that sells goods in large quantities at low prices, typically to retailers.

Retailer

A business that sells goods or services directly to consumers.

Ginger Ale

A carbonated soft drink flavored with ginger.