Suppose That Each Week Henry Buys 12 Peaches and 3

question 128

Multiple Choice

Suppose that each week Henry buys 12 peaches and 3 apples at his local farmer's market. Both kinds of fruit cost $1 each. From this we can infer that:

• A)Henry is not maximizing his utility.
• B)if Henry is maximizing his utility, then his marginal utility from the 12^th peach he buys must be greater than his marginal utility from the 3^rd apple he buys.
• C)if Henry is maximizing his utility, then his marginal utility from the 12^th peach he buys must equal his marginal utility from the 3^rd apple he buys.
• D)for Henry the law of diminishing marginal utility does not apply to peaches.

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Definitions:

Property Rights

Legal parameters that define the ownership and use of property, including land, buildings, and intellectual property.

Allocate Resources

The process of distributing available resources, whether material, financial, or human, among competing demands and uses in an efficient manner.

Willingness to Pay

The maximum amount a consumer is ready to spend for a good or service.

Surplus

The situation where the quantity supplied of a product exceeds the quantity demanded at a given price.