Joanna Is Deciding Between Consuming Good X and Good Y

question 54

Multiple Choice

Joanna is deciding between consuming Good X and Good Y.At her current level of consumption,her marginal utility per dollar for Good X is greater than the marginal utility per dollar for Good Y.To achieve the consumer optimum,Joanna needs to

• A) consume more of Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• B) consume more of Good X until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• C) consume more of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• D) consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal.
• E) continue at her current level of consumption.

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Definitions:

Price-Discriminating

A practice where a seller charges different prices to different buyers for the same product or service, not based on the cost differences but on the buyer's willingness or ability to pay.

Pricing Difference

The variation in pricing for the same or similar products and services in different markets or segments.

Price Discrimination

A pricing strategy where a seller charges different prices to different customers for the same product or service, potentially maximizing revenue by targeting individual willingness to pay.

Insurance Company

A business entity that provides financial protection against losses or damages in exchange for premium payments.