Multiple Choice
A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 30 and the marginal utility of product Beta is 40. The price of product Alpha is $5, and the price of product Beta is $10. The utility-maximizing rule suggests that, to stay within a given budget constraint, this consumer should
A) increase consumption of product Beta and decrease consumption of product Alpha.
B) increase consumption of product Beta and increase consumption of product Alpha.
C) increase consumption of product Alpha and decrease consumption of product Beta.
D) make no change in the consumption of Alpha or Beta.
Correct Answer:
Verified
Correct Answer:
Verified
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