During a Study Session for an Economics Exam with Three

question 147

Multiple Choice

During a study session for an economics exam with three other students, Peter Daltry commented on an example of a consumer who had to decide the on number of slices of pizza and cups of Coca-Cola he would consume. Peter explained that "To maximize his utility this consumer must equate the marginal utility per dollar for pizza and Coca-Cola." Was Peter's analysis correct?

• A) Peter described one of the conditions necessary for utility maximization. The consumer also must equate the marginal utility of pizza and the marginal utility of cups of Coca-Cola.
• B) Peter's statement is correct.
• C) Peter's statement is correct, but we must also assume that the consumer is rational.
• D) Peter describes one of the conditions necessary for utility maximization. The second condition is that total spending on both goods must equal the amount available to be spent.

---

Definitions:

Goodwill Closing

A positive or friendly conclusion to a communication, aimed at maintaining good relations or leaving a favorable impression.

Logical Result

An outcome that naturally follows from the premises or conditions according to principles of logic.

Indirect Claim Request

A polite or subdued approach to making a demand or assertion, often used to avoid confrontation.

Problem Statement

A brief summary identifying an issue that needs resolution or a situation that requires enhancement, highlighting the difference between the existing situation and the hoped-for condition.