A Consumer Is Making Purchases of Products Alpha and Beta

question 176

Multiple Choice

A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 30 and the marginal utility of product Beta is 40. The price of product Alpha is $5, and the price of product Beta is $10. The utility-maximizing rule suggests that, to stay within a given budget constraint, this consumer should

• A) increase consumption of product Beta and decrease consumption of product Alpha.
• B) increase consumption of product Beta and increase consumption of product Alpha.
• C) increase consumption of product Alpha and decrease consumption of product Beta.
• D) makeno change in the consumption of Alpha or Beta.

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Definitions:

Achievement Motive

The internal drive or aspiration to accomplish tasks and goals, often leading to success and personal satisfaction.

Being Admired

The feeling or state of being regarded with respect or warm approval.

Outperforming Others

Outperforming others refers to achieving better results or performance in comparison to peers or competitors, often used in educational, professional, or athletic contexts.

High Standards

A set of criteria or expectations that are challenging and aim above the average level, often used to encourage excellence in performance or quality.