Use the Following to Answer Questions

question 138

Multiple Choice

Use the following to answer questions:
Figure: Coffee and Comic Books
-(Figure: Coffee and Comic Books) Refer to the figure. A consumer has $2 to spend on comic books (priced at $1 per comic book) and coffee (priced at $1 per cup) . To maximize utility, should this consumer buy two cups of coffee?

• A) Yes, buying two cups of coffee maximizes the consumer's total utility.
• B) Yes, because the marginal utility of the second comic book is less than the marginal utility of the second cup of coffee.
• C) No, the consumer should put back one cup of coffee (losing 16 utils) and replace it with a comic book (gaining 18 utils).
• D) No, the consumer should buy two comic books to maximize utility.

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Definitions:

Autonomy

The ability to decide freely and knowledgeably without being forced.

Personal Growth

An ongoing process of understanding and developing oneself in order to achieve one's fullest potential.

Community Feeling

A sense of belonging and mutual support within a group or society.

Intrinsic

Relating to the essential nature of something or motivated by internal rewards rather than external pressures.