The Following Graph Shows the Marginal Utility Derived from Milk

question 5

Multiple Choice

The following graph shows the marginal utility derived from milk and giant cookies purchased by Sandeep.

-Refer to the above graph to answer this question.If the price of milk is $2,the price of a cookie is $1 and Sandeep has a budget of $7,how many will he purchase if he wishes to maximize his total utility?

• A)0 milk and 7 cookies.
• B)1 milk and 5 cookies.
• C)2 milk and 3 cookies.
• D)3 milk and 1 cookie.
• E)3 milk and 4 cookies.

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Definitions:

Short Sale

A financial transaction where an investor sells borrowed securities, anticipating a price decline to buy them back at a lower price.

Mortgage Loan

is a type of loan used to purchase or maintain a home, land, or other types of real estate where the borrower agrees to pay back the lender over a period of time, typically through monthly payments.

Market Value

The current price at which an asset or service can be bought or sold in a fair and open market.

Right To Foreclose

The legal right of a lender or mortgage holder to seize property in the event of nonpayment of debt.