Suppose the Price of Soda Is $2 Each and the Price

question 337

Multiple Choice

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. Jean maximizes utility and buys only sodas and slices of pizza. If the price of a soda increases to $3 each, Jean's marginal utility per soda

• A) will increase and she'll buy more soda.
• B) will decrease and she'll buy fewer sodas.
• C) will decrease and she'll buy more pizza.
• D) Both B and C are correct.

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Definitions:

Price Increase

A rise in the cost of a good or service.

Optimal Bundle

The combination of goods and/or services that maximizes a consumer's satisfaction or utility, given their budget constraint.

Original Prices

The initial cost of goods or services before any discounts, promotions, or changes.

Bureau of Fisheries

A government agency responsible for the regulation and oversight of fishing activities, management of fish populations, and conservation of aquatic habitats.