Assume That the Marginal Utility from Good a Is 10

question 459

Multiple Choice

Assume that the marginal utility from good A is 10 units and that the price of good A is $5 per unit. The marginal utility from good B is 15 units and its unit price is $7. In this situation, a utility-maximizing consumer should

• A) consume more of good A.
• B) consume only good B.
• C) consume more of good B.
• D) consume neither good A nor good B.

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Definitions:

Principal

The main party to a transaction or contract who has a primary interest and authority in the context considered.

Agency Responsibilities

Duties and powers entrusted to an agent or agency acting on behalf of another person or entity, known as the principal.

Constructive Dismissal

A situation where an employee resigns due to the employer's conduct creating an intolerable work environment, effectively being forced out.

Fiduciary Duty

An obligation to act in the best interest of another party, usually in financial or trust relationships.