Assume That the Marginal Utility from Good X Is 10

question 312

Multiple Choice

Assume that the marginal utility from good x is 10 units and that the price of good x is $5 per unit. The marginal utility from good y is 15 units and its unit price is $7. In this situation, a utility-maximizing consumer should

• A) consume more of good x.
• B) consume only good y.
• C) consume more of good y.
• D) consume neither x nor y.

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Definitions:

Audition

The process of hearing or the ability to perceive sound by detecting vibrations via an organ such as the ear.

Rods

Photoreceptor cells in the retina of the eye that are highly sensitive to light and enable vision in low-light conditions.

Primary Qualities

In philosophy, qualities that are inherent to an object and can be objectively measured, such as shape, size, and motion.

Olfactory Receptors

Specialized sensory cells located in the nasal cavity responsible for the detection of odor molecules, playing a critical role in the sense of smell.