Timothy Is Trying to Figure Out What Combination of Bags

question 18

Multiple Choice

Timothy is trying to figure out what combination of bags of peanuts and bags of popcorn he should buy with his $15 budget.The price of peanuts is currently $5 per bag and the price of popcorn is currently $2 per bag.If Timothy's marginal utility from consuming his third bag of peanuts is 15 utils and his marginal utility from consuming his second bag of popcorn is 6 utils,Timothy should

• A) consume more bags of popcorn.
• B) consume more bags of peanuts.
• C) not change his consumption.
• D) consume fewer bags of peanuts.
• E) consume fewer bags of popcorn.

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Definitions:

Interstate Commerce Act

A United States federal law designed to regulate the railroad industry, particularly its monopolistic practices, by requiring reasonable and just rates with the establishment of the Interstate Commerce Commission.

Passed

To have been approved or made official, particularly in the context of legislation or examinations.

Horizontal Price-Fixing Conspiracy

A horizontal price-fixing conspiracy is an agreement between competitors at the same level of the supply chain to set prices, limit production, or otherwise manipulate the market.

Sherman Act

The Sherman Act is a landmark federal statute passed in 1890 that outlaws monopolistic business practices and promotes competition in the United States.