Adhira Buys Chocolates and Almonds

question 131

Multiple Choice

Adhira buys chocolates and almonds.She has 3 bars of chocolates and 4 bags of almonds.The marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18.Is Adhira maximizing her utility?

• A) Yes, the marginal utility from the last unit of each good is equal.
• B) No, she must buy 1 more chocolate bar to equate her quantities of the two goods.
• C) No, she must buy cut back to 3 bags of almonds to equate her quantities of the two goods.
• D) No, without information on her income and the prices of the two goods, we cannot answer the question.

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Definitions:

Corporate Profits

The total earnings of a company after subtracting production and operating costs, including taxes and interest.

Taxed Twice

Refers to a situation where the same income or financial transaction is subject to taxation in two different instances or under two different tax jurisdictions.

Equity

Fairness or justice in the way people are treated within the economy, often relating to the distribution of wealth.

Efficiency

The ability to maximize output with a given set of inputs, or to minimize inputs used for producing a given output.