Sally Devotes All of Her Income to the Consumption of Apples

question 29

Multiple Choice

Sally devotes all of her income to the consumption of apples and Reese's Peanut Butter Cups.At her current level of consumption,the marginal utility of an apple is six and the marginal utility of a Reese's Peanut Butter Cup is eight.Assume that diminishing marginal utility applies to both apples and Reese's Peanut Butter Cups.Suppose the price of an apple is $0.10,while the price of a Reese's Peanut Butter Cup is $0.25.To maximize her total utility,assuming that the goods are divisible,she would:

• A) consume more Reese's Peanut Butter Cups and fewer apples.
• B) consume less of both goods.
• C) consume more apples and fewer Reese's Peanut Butter Cups.
• D) There is not enough information to justify a change in her current level of consumption.

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Definitions:

Hard Sciences

Disciplines that rely on empirical and quantitative data to study the natural world, typically including fields like physics, chemistry, and biology.

Soft Sciences

Fields of study that focus on human behavior and societies, characterized by subjective methodologies, such as psychology and sociology.

True Science

An approach to understanding the natural world through systematic observation, experiment, and evidence, distinguishing it from pseudoscience.

Positive Correlation

A statistical relationship between two variables in which they move in the same direction, meaning as one variable increases, so does the other.