Suppose Sally Allocates Her Budget Between Two Goods, a and B

question 126

Multiple Choice

Suppose Sally allocates her budget between two goods, A and B. She spends her entire income on a combination of A and B, for which the ratio of marginal utility of good A to its price exceeds the ratio of marginal utility of good B to its price. She can increase her total utility by buying:​

• A)more A and less B.
• B)more B and less A.
• C)more A without changing her consumption of B.
• D)less B without changing her consumption of A.
• E)more B and more A.

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Definitions:

Chyme

The semi-fluid mass of partly digested food that is passed from the stomach to the small intestine for further digestion.

Small Intestine

The part of the digestive tract that absorbs nutrients and minerals from food, extending from the stomach to the large intestine.

Abdominal Wall

The layer of muscles and tissue that forms the boundary of the abdomen, providing structural support and protection for abdominal organs.

Sigmoidoscopy

A medical examination method employing a flexible tube with a light and camera to view the interior of the sigmoid colon and rectum.