Solved

Suppose Paul Has Chosen a Combination of Two Goods, a and B

Question 113

Multiple Choice

Suppose Paul has chosen a combination of two goods, A and B, such that the marginal utility per dollar spent for good A (MUA/PA) is .6 and the marginal utility per dollar spent for good B (MUB/PB) is 1. To increase utility with the same amount of money, Paul should:


A) increase the number of B consumed and decrease the number of A consumed.
B) increase the number of A consumed and decrease the number of B consumed.
C) increase the number of both A and B consumed.
D) do nothing; he cannot increase total utility.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions