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​Suppose an Individual Knows That the Marginal Utility He Receives

Question 116

Multiple Choice

​Suppose an individual knows that the marginal utility he receives from the next apple is 5 and that the price of an apple is $2. He also knows that the marginal utility he receives from the next orange is 3 and the price of an orange is $1. If the individual is choosing optimally, the next good he will buy is


A) ​an orange because the marginal utility per dollar spent on an orange is greater.
B) ​an orange because the marginal utility of the orange is greater.
C) ​an apple because the marginal utility per dollar spent on an apple is greater.
D) ​an apple because the marginal utility of the apple is greater.

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