A Consumer Had Been Consuming Product X for Some Time

question 148

Multiple Choice

A consumer had been consuming product X for some time. This period, she buys fewer X in order to try some units of a new product Y. She finds that her marginal utility of X is 20 (at a price of $10 per unit) , while the marginal utility of Y is 36 (at a price of $12) . The utility-maximizing rule suggests that this consumer should

• A) increase consumption of product X because of its lower price.
• B) increase consumption of product X because it is an old reliable product.
• C) increase consumption of product Y because it has a higher MU/P.
• D) increase consumption of product Y because it has a higher MU.

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Definitions:

Personal Virtue

The quality of moral excellence, righteousness, and responsibility that is an aspect of one's character.

Moral Impulse

The human instinct to behave morally.

Absolutism

A political doctrine and form of government where unlimited, complete power is held by a single individual, often a monarch or dictator, or a centralized authority.

Ethical Decisions

Choices based on moral principles and values, often considering the well-being of others and the broader society.