During a Study Session for an Economics Exam with Three

question 31

Multiple Choice

During a study session for an economics exam with three other students, Peter Daltry commented on an example of a consumer who had to decide the on number of slices of pizza and cups of Coca-Cola he would consume.Peter explained that 'To maximise his utility, this consumer must equate the marginal utility per dollar for pizza and Coca-Cola.' Was Peter's analysis correct?

• A)Peter described one of the conditions necessary for utility maximisation.The consumer also must equate the marginal utility of pizza and the marginal utility of cups of Coca-Cola.
• B)Peter's statement is correct.
• C)Peter's statement is correct but we must also assume that the consumer is rational.
• D)Peter describes one of the conditions necessary for utility maximisation.The second condition is that total spending on both goods must equal the amount available to be spent.

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Definitions:

Gen Y Workers

Individuals born between the early 1980s and the mid-1990s, also known as Millennials, characterized by their familiarity with digital technology and different work expectations.

Gen Xers

Individuals born approximately between 1965 and 1980 who are characterized by their adaptability, tech-savviness, and independent work ethics.

Baby Boomers

A demographic group defined by people born during the post-World War II baby boom, approximately between 1946 and 1964.

Behavioral Component

Refers to the actions or reactions of an individual in response to external or internal stimuli.