Assume That Product Alpha and Product Beta Are Both Priced

question 242

Multiple Choice

Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on Alpha and Beta. She buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40 and the marginal utility of Beta is 20. This indicates that

• A)Ellie should make no change in consumption.
• B)given another dollar, Ellie should buy an additional unit of Beta.
• C)in order to maximize utility, Ellie should buy more of Beta and less of Alpha.
• D)in order to maximize utility, Ellie should buy more of Alpha and less of Beta.

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Definitions:

Development of Personality

The process by which an individual's characteristic patterns of behavior, thought, and emotion emerge over time.

Alfred Adler

A psychologist known for founding the school of individual psychology, emphasizing the importance of feelings of inferiority and social interest.

Style of Life

A concept in Adlerian psychology referring to an individual's unique way of achieving superiority or success and overcoming feelings of inferiority.

Alfred Adler

An Austrian medical doctor and psychotherapist, founder of the school of individual psychology, which emphasizes the uniqueness of the individual and the role of societal factors in personality development.