Multiple Choice
At their present allocation of hot chocolate and marshmallows,Tom's marginal utility from hot chocolate is 10 and for marshmallows it's 2,while Cara's marginal utility is 4 and 12,respectively.How can Tom and Cara make each other better off?
A) Tom can consume six more marshmallows so that his marginal utility equals that of Cara.
B) Cara can provide Tom some of both hot chocolate and marshmallows in order to equalize their marginal values for both goods.
C) Tom can trade some hot chocolate with Cara in exchange for some marshmallows.
D) Tom can trade marshmallows with Cara for some hot chocolate.
Correct Answer:
Verified
Correct Answer:
Verified
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