Timothy Is Trying to Figure Out What Combination of Bags

question 51

Multiple Choice

Timothy is trying to figure out what combination of bags of peanuts and bags of popcorn he should buy with his $13 budget. The price of peanuts is currently $5 per bag and the price of popcorn is currently $2 per bag. If Timothy's marginal utility from consuming his third bag of peanuts is 15 utils and his marginal utility from consuming his second bag of popcorn is 6 utils, Timothy should:

• A) consume more bags of popcorn.
• B) consume more bags of peanuts.
• C) not change his consumption.
• D) consume fewer bags of peanuts.
• E) consume fewer bags of popcorn.

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Definitions:

Interval Estimate

An estimate of a population parameter that provides a range of values within which the parameter is expected to lie, often associated with a specific confidence level.

Estimated σ

Approximation of the standard deviation (σ), a measure of the dispersion or variation of a distribution.

Normal Probability Distribution

A bell-shaped probability distribution, also known as Gaussian distribution, that is fully defined by its mean and standard deviation.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to make inferences about the population.