John Is Currently Spending All of His Income

question 5

Multiple Choice

John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $2. If John wants to maximize his utility he should

• A) continue to purchase the same amount of Good A and Good B.
• B) increase the consumption of Good A and decrease the consumption of Good B.
• C) decrease the consumption of Good A and increase the consumption of Good B.
• D) decrease the consumption of Good A and decrease the consumption of Good B

---

Definitions:

Statutes

Written laws enacted by a legislative body at the federal, state, or local level.

Revenue Raising

The process or measures taken by government or organizations to generate income, often through taxes, fees, or the sale of goods and services.

Public Policy

Principles and standards considered by the legislative body to be of benefit to the public and used as a guide to govern actions.

Competition

The rivalry among businesses to attract customers and achieve higher sales, often driving innovation and efficiency in the market.