For a Consumer, the Marginal Utility of Good a Is

question 149

Essay

For a consumer, the marginal utility of good A is 25 and its price is $5. The marginal utility of good B is 60 and its price is $12. The consumer has allocated his entire budget. Is this consumer maximizing his total utility? Explain your answer.

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Definitions:

Actual Product

The tangible physical item or service that is being offered to consumers, including its features, design, brand name, and quality.

Shopping Product

A category of consumer goods that require considerable thought and effort in selection because they possess attributes such as quality, price, and style that are significant to the buyer.

Backpacking Trip

A form of low-cost, independent travel that involves carrying all necessary gear and belongings in a backpack for hiking, camping, or traveling.

Alternatives

Other options available to consumers in the marketplace that compete with a specific product or service.