The price of hamburgers is $2 and the price of brownies is $4. The consumer has $16 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 brownies and receiving 40 utils for the last
brownie. This set of goods
A) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.
B) is an optimum since the entire income is spent and total utility is maximized.
C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for brownies.
D) is not an optimum because the consumer has not spent all of his money.
Answer: D
You might also like to view...
The fact that people with higher incomes get to consume more goods and services addresses the ________ part of one of the two big economic questions
A) "for whom" B) "when" C) "where" D) "how"
Approximately what percentage of national income consists of compensation of employees?
A. 10 per cent B. 25 per cent C. 70 per cent D. 95 per cent